Reg CC and Cashier's Checks

Answered by:

Question:

We had a customer deposit a Cashier's Check for $92,000. He called the automated number listed on the check and it says the check was paid on Feb. 15. He now wants to wire the money out. We are concerned the check could still come back as fraudulent. What are our time frames for allowing complete use of the funds?

Answer:

I'll start by asking whether your bank placed any kind of Regulation CC hold on the deposit. The cashier's check is a "next day" item under §229.10(c)(1)(v) if it was deposited in an account of a payee of the check, in person to an employee of the bank, and with a special deposit ticket if your bank requires one. But you could still place a large deposit hold on $86,475 of the check, which would become available on the morning of the 7th business day following the day of deposit. If you are still in that hold period, you don't have to release that hold until it expires.

But if you did not place a hold or your hold has expired, you cannot deny the customer's right to make a full withdrawal in cash, or by wire transfer. And it's too late at this point for the paying bank to return the check as fraudulent. It got the check on the 15th if what your customer said is true. It had until the midnight deadline on the 16th to return the check, and would have to have notified your bank (the check is over $5,525) of the return by the 17th.