Timing for Hold Notice

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Question:

We had a situation recently when a customer sent a relative to make a deposit into their checking account. The deposit had a large out of town check in the deposit. The teller neglected to place a hold on that item at the time of deposit; however, I thought we could send the hold out within 24 hours, since the person making the deposit was not on the account. Another employee disagreed, stating that the deposit was made in person, therefore the funds availability hold notice should have been given at the time of deposit. What is your opinion?

Answer:

Section 229.13(g) contains an allowance whereby you have one business day to invoke a hold under certain circumstances. This need not require that the deposit be made by other than the customer. You might maintain that as the deposit was processed "new facts" were observed by the trained employee which were not apparent to the teller.

Exceptions. 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, if the facts upon which a determination to invoke one of the exceptions in paragraphs (b) through (e) of this section to delay a deposit only become known to the depositary bank after the time of the deposit. If the notice is not given at the time of the deposit, the depositary bank shall mail or deliver the notice to the customer as soon as practicable, but no later than the first business day following the day the facts become known to the depositary bank, or the deposit is made, whichever is later.

First published on BankersOnline.com 2/16/04