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Reg CC & Holds on Cash Deposits
by John Burnett, BOL Guru
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Question: Our bank does case-by-case holds. Reg CC clearly states that cash must be available on the second business day following the day of the deposit if not deposited in person to a bank employee. Why isn't cash treated the same as a US Treasury check when not deposited in person (still next day)? I can't think of a reason ever to place a hold on cash even if it isn't deposited in person. If for some reason we did place second-day availability on cash deposited to an ATM, would we need to make the first $100 available on the next day?
Answer: There are a couple of questions here:
Why isn't cash treated the same as a US Treasury check when not deposited in person?
It doesn't make sense that treasury checks get better treatment than cash, but they do. Remember that the EFAA was engineered in Congress, and the Fed was restricted in what it could design itself. IMO, it's a legislative glitch that no one has seen fit to correct.
If for some reason we did place second-day availability on cash deposited to an ATM, would we need to make the first $100 available on the next day?
No. The $100 rule only applies to checks on which you place holds.
First published on BankersOnline.com 09/2/03
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