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#704226 - 03/21/07 04:17 PM Funds Availability - "Other" reason
SMQ, CRCM Offline
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SMQ, CRCM
Joined: Apr 2001
Posts: 4,828
Between the lines
I need another opinion, I've done a search but could not find anything on point. I am reviewing an exception hold notice where the teller check other and wrote in "Unable to verify check." What are your thoughts on this? What other reasons would you put for the "Other" line?

It was a large check, so I would have preferred the "..checks exceed $5,000..." but I really need to know what everyone else does for this line and if they see a problem with what was actually written.

Thanks,
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Deposits and Payments
#704233 - 03/21/07 04:27 PM Re: Funds Availability - "Other" reason SMQ, CRCM
MN Banker Offline
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Joined: Aug 2006
Posts: 980
I would think in this situation the "Reasonable cause to doubt collectibility" would have been used, with the reason being "unable to verify check".

We don't have an "other" line on our hold forms - tellers can only use the reasons provided in the regulation (unless it's a case by case hold in which they don't need a reason)

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#704245 - 03/21/07 04:34 PM Re: Funds Availability - "Other" reason MN Banker
Skittles Offline
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Skittles
Joined: Sep 2002
Posts: 13,965
TN
Would the bank not verify the funds or they stated the funds weren't available? If the bank doesn't verify funds that reason cannot be used

I have never seen 'other' used correctly.
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#704809 - 03/22/07 11:24 AM Re: Funds Availability - "Other" reason SMQ, CRCM
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
There are a lot of reasons why a depositary bank may not be able to verify funds; e.g. the drawee bank is closed, the drawee bank does not verify funds, or the teller at the depositary bank did not have time to make the call. All are equally unrelated to a reasonable belief that the item will not be paid.

When you call the drawee bank and they indicate that "funds are currently not available" you have reasonable cause to doubt collectibility. When the drawee bank calls you and says the item is being returned for "insufficient funds" you have reasonable cause to doubt collectibility. If you have a reasonable belief that the drawer or even the drawee bank is insolvent, you have reasonable cause to doubt collectibility.

However, when the drawee bank does not answer the phone or, as a matter of policy, does not confirm funds, then you don't have an ounce of additional information and you do not have reasonable cause to doubt collectibility. There is no presumption that only funds from checks where funds can be verified are subject to Regulation CC's availability requirements.

The reason is bogus and should draw criticism, but not everyone agrees.
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#704825 - 03/22/07 12:22 PM Re: Funds Availability - "Other" reason Elwood P. Dowd
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Just for the record, I'm one of those that doesn't agree. Unfortunately I don't have the time to elaborate at this time other than to say all the bank needs is "the existence of facts that would cause a well-grounded belief in the mind of a reasonable person” that the check is uncollectible. If I attempt to verify the funds and cannot, I believe I satisfy this requirement.

I often see banks use the reason "Unable to verify check" and have NEVER seen a bank cited for it.

Hopefully, I can contribute more later.
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#705076 - 03/22/07 04:30 PM Re: Funds Availability - "Other" reason David Dickinson
LauraL Offline
Gold Star
Joined: Jun 2005
Posts: 365
Georgia
We use "unable to verify check" all the time. BOA won't verify checks anymore, so we feel that when we try and call them, but they say no, we've done our job to try to verify and we conclude that we cannot verify. We've never been cited for this.

We also have issues with credit card checks - who says that once we call and verify, the customer can't go out and run up the card to their credit limit? I know this one's controversial because your not supposed to target a type of check, but we feel we have a legitimate reason - and for the record we don't place holds on all credit card checks, just most of them.
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