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#1769478 - 12/20/12 03:03 PM Uncollected Funds Paid Item Fee
SouthernComfort Offline
Platinum Poster

Registered: 08/09/01
Posts: 704
Loc: Southern Illinois, USA
Is everyone disclosing an Uncollected Funds Paid Item Fee on their deposit disclosures? We have the Return Item Fee and the Paid Item Fee but our core processor says we need to disclose the UCF fee. If we disclose it, do we need to list it as UCF Paid Item Fees and UCF Return Item Fee?

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Operations Compliance
#1769535 - 12/20/12 04:05 PM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
k8e Offline
Junior Member

Registered: 09/07/12
Posts: 47
We disclose both. I think the more detailed the better.

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#1769620 - 12/21/12 08:20 AM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 52517
Loc: Galveston, TX
What is an "uncollected funds paid item" fee. The money in the customer's account is either available or it is not. Whether the funds are collected or not has no impact on your duty to pay a check.
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The opinions expressed are my own, take them or leave them.

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#1769705 - 12/21/12 10:21 AM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
Ken_Pegasus Offline

10K Club

Registered: 08/30/01
Posts: 17948
Loc: Another trip around the sun
Any UCF fee is "in connection with the account." If you impose them, you must disclose them. The fee description and the perpetual monitoring of your bank's clearing arrangements to establish accurate (not guestimated) time frames for when you have "good funds" would be significant challenges.

Regardless, the idea of returning a check for "uncollected funds" pretty much died with the advent of Regulation CC in 1988. It's clear evidence of a hold by another name. It would have had to be disclosed to the customer and could not extend beyond the period allowed by the regulation.
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You cannot launder your own paycheck. Princess Romeo

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#1769823 - 12/21/12 12:40 PM Re: Uncollected Funds Paid Item Fee [Re: Ken_Pegasus]
SouthernComfort Offline
Platinum Poster

Registered: 08/09/01
Posts: 704
Loc: Southern Illinois, USA
This is from CSI our core processor: "Based on an examiner's recent interpretation of the Truth in Savings Act, new fee descriptions ar needed for fees assessed on Uncollected Funds". 'A UCF is charged when sufficient funds are in the account to pay the item, but the funds are not available due to a pending authorized transaction that has not cleared the account such as an authorized debit card transaction. These fees are distinctly different than an overdraft fee since these fees can be imposed even if the account is not overdrawn and therefore, requires separate disclosue.'

Actions required by the Bank: Update your account disclosures so that the new fee descriptions ar listed on them. Ensure that the wording on the disclosurew matches what will display on the customer's statement.

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#1769901 - 12/21/12 02:51 PM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
Ken_Pegasus Offline

10K Club

Registered: 08/30/01
Posts: 17948
Loc: Another trip around the sun
This situation:

Quote:
..when sufficient funds are in the account to pay the item, but the funds are not available due to a pending authorized transaction that has not cleared the account such as an authorized debit card transaction.


is actually the reverse of "uncollected funds;" i.e. the funds may be collected, but there is a prior claim to them. Strictly speaking, there are multiple claims and the funds available are insufficient to pay them all. If all of the claims are paid there will indeed be an overdraft.

Note that the opinion is attributed to one examiner...

P.S. I would not want to write the disclosure describing this fee. Nor would I want to try to defend its fairness. Your bank might end up charging a fee for something that is never reflected on the customer's statement...


Edited by Ken_Pegasus (12/21/12 03:22 PM)
Edit Reason: Add P.S.
_________________________
You cannot launder your own paycheck. Princess Romeo

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#1769923 - 12/21/12 03:12 PM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
Skittles Online
10K Club

Registered: 09/10/02
Posts: 12186
Loc: KY
Wasn't there a similar thread on this recently about returning an item of a 'pending hold' was out there?
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The price of discipline is always less than the pain of regret. –Nido Qubein

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#1769947 - 12/21/12 04:08 PM Re: Uncollected Funds Paid Item Fee [Re: SouthernComfort]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 31558
Loc: Cape Cod
I would not suggest that a bank adopt changes to its disclosures based purportedly on one examiner's opinion. I happen to feel that the industry must adopt one acceptable lexicon for overdraft services, fees of all kinds, and balance types. Customers should be able to rely on uniformity when they get disclosures about uncollected or unavailable funds, overdraft fees, NSF fees, and so on. If the industry can't or won't do it, the Bureau should do it and make the industry (and examiners) adhere to it.

End of rant.
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John S Burnett
BankersOnline.com

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