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60-Day Restriction for Depository Account

Question: 
Can I restrict an account up to 60 days for investigation purposes when depository account experiences return items that return as fraudulent or unauthorized? Also can the 60-day restriction be extended after each returning deposit? When do I start counting the 60 days? When the last return item is received? EX: receive 1st return item on 10/1- 60 days is 11/29, receive 2nd return item on 10/3 can I extend the restriction until 12/1, so on and so on?
Answer: 

That would depend on what "restrict" means to you and what legal authority you could muster to support whatever action you are contemplating. There is no federal law that allows a bank to label activity as suspicious and, as a result, automatically deny a customer access to his funds for any period of time, let alone 60 days.

You would be looking to 1) the terms of a contract and 2) a concurrent opinion from at least one judge.

First published on 12/02/2018

Filed under: 
Compliance
Filed under compliance as: 
Fraud
Unauthorized Checks/Drafts/Transactions/Withdrawals

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