Root canal, Reg. CC, root canal, Reg. CC. Well for once "CC" got my attention as I am doing an audit.

Two things I don't like:
1) One account (isolated) was revised the same day from a 5-day nonlocal hold to an 11-day exception because of bad deposits in the past. He deposited $3,500 and got cash back of $200. When we changed the hold in a central processing area that reviews these, they held $3,500. We didn't effectively give the first $100 and that would be OK under an exception hold, except that we'd already given $200 in the less cash. I don't know that we can net this out and hold other monies. Under .19(e)(i) we didn't exceed the deposit, but the timing was poor. I don't know that it caused any overdrafts or problems, I am focusing on holding other funds. What do you think?

2) If the Hold Notice says $100 was given, but it wasn't, and didn't need to be, would you cite this as a violation and under what cite specifically? It is misleading, but I'm not sure it is worth a cite.

Start with: is this one of a many violations, or is it isolated? As an isolated exception, I would be more willing to let this go, or handle it verbally. If this is one of a pattern of problems, then it's a report item. Given the isolated nature of the problem, I think I would pass.

When your centralized review changes holds, especially if they invoke an exception, I would recommend sending a new hold notice.

On the cash, you can always argue that the $200 cash given the depositor were "other funds," and the hold was for the amount of the deposit, as permitted under 229.13. That may also cover you for the inaccuracy of the original notice. It's a reach, but a defensible one.

I need to look at our disclosures for inclusion of this, but Pat Cashman pointed out that this is not an unanticipated issue under Reg. CC.

C-6--Holds on Other Funds (Check Cashing)

If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it.

And fortunately this is isolated. Before we centralized Reg. CC hold notices this was a real headache. Centralizing it and providing an accurate calendar plus a customized hold notice has really helped. We added a line "Was the first $100 provided?" Big reminder and greatly reduced violations.

Andy
Is the loading process centralized or just the receipt and review of notices? Does your customized notice differ much from the sample notice in the reg? We've had repeat problems too. Some involve the counting of days and others range from using an incorrect reason to failing to make the first $5k available.

The branches make a recommendation and notice to the customer, but it then hits a backroom area via fax or e-mail (closed system). They review and revise as needed.

The form is similar as I recall. But we have info at the top, date of deposit, date of notice, deposit amount, DDA or SAV, date opened. The bottom has a Prepared By and Reviewed By line as well as the $100 availability question.

We used to have problems with the dates (hold until and computer release date) until I wrote an Excel sheet to assist in that. In fact that calendar is available at my Web site if you want to try it. Its free.

http://www.vvm.com/~zavoina