Answer:
When your bank receives a notice that a deposited item is to be returned, you have an obligation under both Regulation CC and the UCC to notify your depositor by your midnight deadline (midnight of the banking day next following the day on which your received the notice). The optimal way to do that, I think, is to include that notice as part of an actual charge-back of the item to your depositor's account. The debit to the account will be offset with a credit to a suspense account, which will be cleared by a debit to suspense and a credit to the Fed (or other correspondent) when the item is actually charged back to your account with that correspondent. You have the right to do this, and if you received a large-item return notice ($2,500 or more) under Regulation CC to trigger this activity, you have a warranty from the payor bank that it is returning the item.
As for those banks whose policy doesn't provide for a charge-back pending receipt of the item, here's an answer to the original question:
If you set up your hold with an availability date, for example, if you adhere to the 7th business day availability called for on most exception holds under section 229.13, you must include that date on your hold notice. Note, however, the last sentence of section 229.13, where it says you can place longer holds, but you have to be able to justify them. In other words, the 7th business day release of a routine exception hold is a "safe harbor" limit.
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