Our bank's funds availability policy is to make funds from deposits available to the customer on the first business day after the day we receive the deposit. Our system assigns a two or three day Reg CC hold based on routing numbers. Am I correct that we should be providing notices to any customer we are not giving next-day availability? Does this apply to business as well as consumer accounts? I would also be interested in how many of you have a more stringent Reg CC policy. Thanks in advance for any response.

If your practice does not match your policy, you must redisclose to consumers as well as commercial customers. I would make sure, however, that you are placing a "hold" on these items and not just capturing the float for collectibility and interest accrual purposes.

Are you confusing "collected funds" with "available funds"? Otherwise - you have a problem with your disclosure.

Our system displays ledger, collected and available balance. The "hold" (Our computer "guru" is telling me it is a true hold) is impacting the available balance. However, our proof work is outsourced, so the "hold" is placed when the item goes through proof, NOT at the teller window. This makes it nearly impossible for us to be aware of what holds are being placed on which deposits.

It sounds like someone needs to have a chat with your outside processor. You can't normally just assign 2 or 3 day holds to checks and in order to pull off automatic holds on all deposits, you nornally need things like special deposit slips for your next day items. I think that there needs to be a few more people involved in this discussion to get all the true facts. If this is the case, then you have some real work in making sure your processing systems are in compliance and that your disclosures are accurately portraying your hold policy.

Do you pay checks against the ledger balance or the available balance?

We will pay inclearing checks, however, the funds are NOT available through the ATM and MAY be refused at the teller line because of the unavailability.

I had a bank that did this once. Paid inclearings on ledger, but paid cash, cashier's checks or wires on available funds.

General policy was to allow next day available for checks, exception was cash, cashier's checks and wires.

I never agreed with it, but the FDIC reviewed policy, hold procedures and notices and did not comment on the practice.

The FDIC didn't comment on the practice most likely because they didn't ask the right questions and was not aware of what was really happening.

My question is that if you pay inclearings against ledger balance and not available balance - how do you place a "real" hold on the account? I still think there is a piece or two missing in the puzzle.

This could be just a parameter problem in your processing system where the proper processing parameters are not set properly, i.e., parameter set to a "1" when it should be a "0", etc.

Try to find out how the available balance is calculated. It sounds to me like it's mirroring the collected balance instead of the ledger balance.

I think you hit the nail on the head. They were told that wires would only be paid against collected funds, but I don't think the FDIC examiners grasped the meaning.

It is definitely a parameter issue. That bank chose to set the parameters to have a 2 day float on all deposits.

We did not have a next day availability policy however. We disclosed two days. You might have to adjust your disclosure if you cannot get the bank to adjust the practice.

Thanks for everyone's comments. I think I have finally convinced our operations department that we need to look into this matter immediately, and, ultimately discontinue the practice of placing "automatic" holds.