Reg CC: Hold Notice Notification Requirements

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Question:

I had a customer tell me that I was out of Compliance on Reg CC because she was not notified at time of deposit of a hold being placed. It is my understanding that we have 24 hours to put a Notice of Hold in the mail to the customer. We did not notify the customer at time of deposit due to large items being reviewed by myself at a later time in the day.

Answer:

You have until close of the next business day to notify the consumer when a casebycase hold is imposed.

226.19(c)(2)(ii)(ii) Timing of notice. The notice shall be provided to the depositor at the time of the deposit, unless the deposit is not made in person to an employee of the depositary bank or the decision to extend the time when the deposited funds will be available is made after the time of the deposit. If notice is not given at the time of the deposit, the depositary bank shall mail or deliver the notice to the customer not later than the first business day following the banking day the deposit is made.

When done in this manner you have additional requiremmnts as to possibly refunding fees incurred as a result. Look at 226.19(c)(3)

First published on BankersOnline.com 12/3/01