Holds on Accounts Not Covered by Reg CC

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Question:

I recently read that Regulation CC does not apply to money market and savings accounts. Does that then mean that a bank cannot put a hold on a check that is deposited into a money market and savings account? Also, what about the new account rule under Regulation CC? Does that mean that we cannot put additional holds on items under the new account exception? If we put exception or case-by-case holds on checks deposited in money market and savings accounts, would that be a violation?

Answer:

Portions of Reg CC do not apply to money market and savings accounts. Specifically, the sections of Reg CC dealing with limitations on holds do not apply. That doesn't mean that you can't place a hold on those accounts. Reg CC doesn't grant permission to place holds, it sets limits on holds. Reg CC limits a case-by-case hold to a maximum of two business days. For a deposit to a money market or savings account, you would not be subject to that limitation.

There are other areas that still could set hold limitations for deposits into these accounts. State law could do so. In addition, depending on how you worded your funds availability policy, you may have either intentionally or inadvertently covered such accounts under your standard funds availability policy applicable to transaction accounts. A third area where you may have set limits either intentionally or inadvertently is in your deposit account contract. You'll need to check all of these areas before proceeding with placing holds of longer duration than allowed under Reg CC on savings and money market accounts. If there are no limits in those areas, you are free to place holds of any length you choose on any deposits to those types of accounts without that being a violation of Reg CC or any other prohibition.

First published on BankersOnline.com 6/14/10