Reg CC - Collected Balance Vs. Available Balance Answers by John Burnett and Jim Bedsole, BOL Gurus Guru Bios
Question: Should a bank ever go by a customer's "collected balance" when deciding to pay a check for a non-customer or to purchase a cashier's check? I was always taught not to go by that balance but to go by "available" because "collected" has to do with the different routing numbers on checks deposited. If you do not put a Reg CC hold on a check, isn't it against the regulation to not pay against that check even though you did not put a hold on the check and notify the customer of the hold? This has been the big discussion at our bank and this is the first bank I've worked at that even goes by this balance.
Answer by John Burnett: Regulation CC recognizes two balances only -- ledger (actual) and available (ledger minus holds). References to a "collected" balance are usually throwbacks to the days before Regulation CC. They refer to a bank's estimate of whether funds deposited by check has been "collected." Those estimates were about as accurate back then as they are now, but today they mean nothing, because you have to make funds available in accordance with Regulation CC.
Answer by Jim Bedsole: In most processing systems today, collected balance is a reflection on whether the institution has received credit for the item from the Federal Reserve (or whoever is clearing your checks) and is used to determine when interest accrual starts (under Reg DD, institutions are allowed to delay interest accrual until credit has been received for the deposited item).
You are correct that many bank employees misunderstand the terminology and incorrectly believe "collected" balance is a true reflection of whether the item is good. But John is correct about the balances Reg CC recognizes. And Reg CC says that when you make funds available, they are to be available just as if they were fully and finally collected - see §229.2(d).
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