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New Account & Large Item Exception Holds
Answer by John Burnett, BOL Gurus
Guru Bios
Question: I am a little unclear on Reg CC. To put on an exception hold for a new account, what is the definition of new? How many days 30 or 60? We are wanting to put a hold on a large non-local check and are arguing if we have to give them access to the first 5,000.00 the next day. Can we put a hold on the funds?
Answer by Jim Bedsole: The new account exception is available, if as of the deposit date, the customer has had a transaction account relationship with you for less than 30 days. You can certainly put a hold on the funds. The real question is how much of a hold and for how long. Under the new account exception hold, only the first $5,000 of items that normally require next day availability (229.10) has to be available next day. Anything else from those items that normally require next day availability can be held until the 9th business day. Other local and non-local checks can be held until whatever limit has been set by your bank for new accounts and described in your funds availability notice. Under the large item exception hold, the first $5,000 of deposits defaults to the normal availability process. Anything else above the $5,000 can be held for either 7 (local) or 11(non-local)business days.
If your account relationship is less than 30 days old, use the new account exception hold for a non-local check because it gives you the ability to hold all of the check and not have to make the first $5,000 available sooner. If your maximum hold time in your notice for new accounts is less than 11 business days (let's say that it says 9 days) you will only want to put the new account exception hold on the first $5,000 and you'll want to put the large item exception on the amount over $5,000. This allows you to still hold the first $5,000 for 9 days and the remaining amount for 11 days.
First published on BankersOnline.com 8/28/06
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