Caution - Alabama Credit Union (Especially OOS Families)

ChicagoBear
Wed, 06 Aug 2014 23:25:57 +0000

^^In my 28 years of bank auditing and compliance work, I can definitely state that small institutions are the biggest offenders of the funds availability regulations. They tend to be most concerned about bad check losses whereas larger banks acknowledge there will be periodic losses and it’s a cost of doing business. I have no problem if a bank uses available LEGAL reasons to hold a deposited check. It’s the holds in violation of the regulations that tick me off.

Dealing with a larger bank can be much easier. Last night around 7:30 pm I wrote a $7,000 personal check off my money market account at a small suburban bank (that has higher interest rates) and deposited it to my main account at Bank of America via ATM. School expenses are due! The entire $7,000 was available this morning.

jrcsmom - did your bank give you a written notice of an extended hold? Were your checks over $5,000? Extended holds can only be made with written notice given directly or by mail to the depositors. Assuming your account is in good standing concerning overdrafts, and that it hasn’t been told your checks for deposit won’t be paid, (and the other reasons I listed above) no additional hold is allowed unless the total deposit isore than $5,000.

Ultimately this all an exercise in “risk management” by the various parties. The management of institutions that play “fast and loose” with the rules view minimizing the risk of check losses as more important than than regulatory and legal risk from cited violations or lawsuits (The big gun is Congress specifically authorized class action lawsuits realizing any individual claim would likely be too small to pursue.). The regulators perform examinations on a risk focused basis. The funds availability regulation has been around for decades and there are dozens of other new rules so funds availability may not get as much attention as it use to. And most customers don’t understand the law or regulation and just accept whatever they are told and don’t realize other institutions have a much more favorable practices.