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Ask Dr. Don

How long can my bank held my check?

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?
Pam Paycheck

Dear Pam,
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.

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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 you.

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 report.

You can request a copy of your ChexSystems report using its Web site.

-- Posted: July 8, 2002

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