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Retaining Notices for Exception Holds

Answered by: 
John Burnett

Question: 
In Reg CC, 229.13(g)(5), it states that we have to retain notices for exception holds along with a brief description of the reasoning for the exception hold. Does the regulation talk about a copy of the actual delayed funds availability notice that was sent to the customer, or would a software system that stores the vital information from the notice be sufficient? After reading Appendix E to 229.21 (g)Commentary to record retention, it sounds to me that a copy of the actual notice provided to the customer must be retained.
Answer: 

The requirement only applies to notices provided under the "reasonable cause" exception hold permitted by Section 229.13(e). It mandates that a bank make and maintain a record of such notices (not a copy, although a copy could meet the requirement), and that the record include an explanation of the reason for the reasonable doubt of collectibility. If the reason given to the customer was "confidential information", that information should be explained in the record.

First published on BankersOnline.com 1/03/11

First published on 01/03/2011

Filed under: 
Compliance
Filed under compliance as: 
Availability
IT
Record Retention

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