Answer:
Case-by-case holds (since that's the terminology Reg CC uses, not standard hold) come into play for institutions that do not automatically hold deposited items to the statutory limits. Many institutions choose to make most items next business day. Those institutions that do this can still apply a case-by-case hold to items without any specific reason for doing so. In this type of case-by-case hold, the date the funds must be available depends on whether the items are a local or a non-local item. For local items with a case-by-case hold, the item must be available on the second business day following day of deposit. For a non-local item under a case-by-case hold, the funds must be available by the fifth business day after the day of deposit. You can place case-by-case holds and make the funds available in a shorter amount of time, just not longer.
To hold the funds for a longer period of time than the case-by-case hold will allow, you must have a legitimate exception hold reason. Under an exception hold, a local item does not have to be made available until the seventh business day following the day of deposit. A non-local item does not have to be available until the eleventh business day following the day of deposit. Again, you can certainly use shorter times and with exception holds, if reasonable, you can also use longer times (although this is rare and the burden is on the bank to prove that the longer time is reasonable). Your deposit must meet the criteria for one or more of these six possible exception hold reasons:
- New account
- Large deposit
- Repeat overdrafter
- Redeposited items
- Reasonable cause to doubt collectibility
- Emergency conditions
If your deposit does not meet any of these criteria, you are limited to the two day and five day case-by-case holds for the deposit, unless you refuse the items for deposit or require them to be deposited into a non-transaction account where Reg CC does not apply.
First published on BankersOnline.com 5/05/08
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