Can we place an exception hold on a tax refund check payable to two individuals if only one of the payees is a customer? We would be unable to verify the endorsement on the payee that is not a customer.

What good would that do? You generally have a one year exposure for a fraudulent endorsement and it may be more like 18 mos. if it is a Treasury item.

Good point. I'm the compliance officer and am having disagreements with teller supervisors regarding placing holds on deposits.

Your sole recourse on such an item would be back to the individual for whom you accepted the deposit unless the item was deposited to an account owned by both check payees. That might afford you some additional protection depending upon your account agreement.

Read the Reg. CC rule carefully. A treasury check gets next-day treatment if it is deposited into the account of a payee. It does not say "all payees" or "the payee(s)."

I can't think of a reason for holding the check that makes any sense. It buys you absolutely nothing. Either accept it for deposit or don't.

Just to give you a trio of respondents singing in the same key: There are indeed a number of circumstances where you can put holds on U.S. Treasury checks. Inability to verify a prior endorsement would be an example.

The problem is that any hold you can impose is not an effective risk management tool; the hold will expire long before payment on the check is declined or you get a reclamation notice.

Know your customer.

Thanks for everyone's advice!