I reviewed the reg and see nothing that would prevent this. on the notification of a returned item, indicating the check will be redposited, that the delayed funds notification can also be on the same notice ( using the model language). Am i correct? or did I miss something?

Are you talking about automatically representing a returned item? If you are, I would make sure that you have a hold harmless agreement with your customer. Yes, you could provide an notice of hold on the same form - there are no segregation requirements.

thanks