||Ask Dr. Don
How long can my bank held my
Dear Dr. Don,
I didn't look at my receipt after making a deposit. I deposited
my payroll check, which is located in the same state as my branch.
I am a new customer at this bank, and was not told of holding methods
by this bank. I assumed that my check would not be held, and I wrote
checks on my account.
My question is can the bank hold my payroll check
for 13 days and hold an out-of-state check for seven business days?
I've shared your frustration. I once had a cashier's check issued
by the bank (and branch) where I was depositing the funds, and they
wanted to place a 10-day hold on the check. I've also had to wait
through the 30-day account seasoning before checks deposited into
my account were credited to the account in a timely fashion.
Banks must follow the provisions of Federal Reserve
Regulation CC, Availability
of Funds and Collection of Checks. Regulation CC requires that
depository institutions must disclose their funds-availability policies
to customers. General disclosure requirements are spelled out in
Section 229.15, while additional disclosure requirements are spelled
out in Section 229.18.
New accounts, defined as accounts that have been open
for less than 30 calendar days, are held to a different standard
than seasoned accounts. Checks that exceed $5,000, regardless of
the age of the account, can also have longer hold periods. State
laws concerning funds availability may vary from federal regulations
in some states.
While it's possible that you did not receive proper
notification or disclosure, it's more likely that the bank is in
compliance and you just didn't read the disclosures provided to
It's certainly worth the effort to find out from the
branch manager what the bank does to ensure compliance with Regulation
CC and establish that the branch was in compliance for your deposit.
If they didn't meet the disclosure requirements, it will give you
some negotiating leverage when the discussion moves on to the insufficient-funds
checks written on the account.
Assuming that the bank was in compliance, you will
still need to resolve the insufficient-funds issue. The bank may
have reported the problem to ChexSystems,
a consumer reporting agency that monitors your banking history much
like the credit bureaus monitor your credit history. Work with the
bank to resolve these issues and keep them off your ChexSystems
You can request a copy of your ChexSystems report
using its Web site.
-- Posted: July 8, 2002