Answer:
If you place an exception hold, it has to be based on the banking day the check in question was deposited. That is, according to your question, five business days ago now, and the longest standard exception hold duration calls for funds to be available on the seventh business day (Friday, two days from now).
I am not a fan of using Regulation CC holds when a bank gets a large item return notice. The limited hold duration can slip away too fast, and the funds can be out the door before the bank realizes it. Instead, I suggest you go ahead and debit your depositor's account for the full $50,000 today, put the funds in Suspense, and take them out of Suspense when the item is charged back to your bank and delivered. When you send your customer the notice of the $50,000 debit, include a brief description of the check and the fact that it's being returned unpaid. That will take care of your legal responsibility to notify the customer of the dishonor of the check under the UCC and Regulation CC.
First published on BankersOnline.com 8/09/10
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