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Placing Holds: More Fun with Reg CC

Regulation CC hasn't changed much in recent years and the problems that came with its implementation have died down. But the violations continue. This isn't a case of constant regulatory change causing compliance problems. It is simply a matter of the task being very difficult.

Identifying and placing holds on check deposits is complicated. To do the job correctly, the teller must separate out any special checks, including any applicable policies for special deposit slips, separate local from non-local, total up checks in the deposit and in each category, and then figure out the hold.

After finishing that task, the teller has to fill out the notice correctly.

This isn't easy. It takes both training and practice. To help with the practice, here are some deposit examples. Have your tellers calculate and place holds on these example deposits. Like life, this is open-book. Unlike real life, they have some time in which to figure this out. To make this even more of a test, use your local and non-local routing numbers for the checks instead of telling them which are local.

Place and explain the holds placed on the following deposits. Give two answers to each problem. First, place the longest hold possible on the largest amount of the deposit. Second, place the shortest holds, making funds available to the customer sooner while using all available hold options. Also ask them to identify any other issues they see in these situations.

  • Thomas Doubtfire, who has a small cottage industry business selling candles, deposits 15 checks, all for $50 from customers who have bought his special candle set. You notice that two of the checks were deposited previously and have been returned. Ten of the checks are drawn on local banks, five, including the two being re-presented, are drawn on non-local banks.


  • Eve R. Hopeful, who opened her account with your institution last week, comes in to deposit five checks. Three are $100 birthday checks from grandparents (or so she says.) All three of these birthday checks are drawn on non-local banks. One check, for $4,372.83, is a check made out to Hopeful, drawn on a non-local bank in the community from which she moved. The notation says "to close account." The last check, for $1995.87 is her last paycheck from her former employer. It is drawn on a bank that has branches in your community but the routing number isn't local.


  • Count E. Clerke brings in three checks to deposit to his personal account. One is his monthly paycheck for $1,750.00 from the local county, signed by the county treasurer and drawn on the county's account with your bank. The second check is a travel reimbursement check from the county. This check, for $587.00, is also signed by the county treasurer but is drawn on a bank across the street. The third check, $500.00, is a dividend check from a Fortune 500 company.


  • Mohammed al Habib deposits three checks into his personal account. One, for $3567.00, is his paycheck from the small business he owns. One for $3.87 is a refund check from Mega-Bank for overpayment on his Visa account. The third is a check written to Mr. Al Habib for $6,000. This check is drawn on a bank in Egypt. He also deposits $10,375 in cash to his business account.


  • Granny Smith deposits $3050 in cash from the sale of her apples at the apple stand and a check from Food-to-You markets for the remainder of her crop. The check is for $3,500. She wants to know when she can wire $3100 to a needy grandchild in New Zealand.


  • Ivan Z. Terrible has a personal account and a business account with you. Ivan comes in to make several deposits. To his personal account, he deposits $5,000 in cash and a check from his company account for $8,000. This check has a memo note "paycheck." To his business account, he deposits $8,000 in cash, a check for $8,000 in U.S. dollars drawn on a bank in Moscow, Russia, and five checks for $75.00 each. These five checks are local and written by Ivan's customers for the special blintz-of-the-month deal his bakery is offering.


  • Earl E. "Dutch" Grower, is an avid gardener. He has made a special order of bulbs from Holland and needs to wire $3,050 to the company in Holland to pay for his order so it can be shipped in time for spring planting. At the moment, he has $550 in his account. He makes a deposit to cover the wire. He deposits three checks: his paycheck from the county for $1,575, a check for $430 from his grandmother drawn on your bank, and a check for $500 drawn on his savings account in a bank on the other side of the country (where he spends the winter.) When can you send the wire? Don't forget to charge your wire fee.

Copyright © 2002 Compliance Action. Originally appeared in Compliance Action, Vol. 7, No. 3, 3/02

First published on 03/01/2002

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