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Question & Answer
Question: We have recently decided to change our hold policy and impose case by case holds in certain situations. Our previous policy has been to make deposited funds immediately available. What kind of notice to customers should we provide?
Answer: Regulation CC requires that when you change your policy, you send a notice to the customer within 30 days. §230.18(e). There are two key concepts here. First, the bank must send a notice to depositors. It is not enough to post a notice in the lobby. After all, there are some customers who only use the ATM and may never enter the lobby.
Second, you may send the notice after you implement the new policy. Although the regulation recommends sending the notice before implementing the policy, it permits the notice to be send within 30 days after the policy is implemented. A word of caution here: if you opt to send the notice after implementing the new policy and the policy results in later availability of funds, be sure your front line is properly trained and provides hold notices when the customer is at the teller window. Otherwise, you will have some angry customers.
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 7, 6/97
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