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#1301348 - 12/08/09 10:00 PM I hate hold policies, however...
Trees Offline
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We are currently a case by case hold bank. No strict avail. standards. Now we are thinking of changing to a strict hold plicy.in view of the fct that soon there will no longer be non-local checks (at least not in the East) we want to have as a policy "all checks over $5,000. we will hold" (but cust. will get first $100. next day) and then the remaining $4900 after five days. Period. (Of course ACH, cash, etc. will be same day, as our Treas Dept checks, etc). Our plan is to have an automated system in the back office hold all checks in this category...now, this being said, we will have some built in exceptions, i.e. major commerical accounts. We will have our system Un hold the checks...See anything wrong with our thinking, let me know!

Also, is it possible to have a case by case and strictly coded policy at the same time? I thought it was one way or the other?

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General Discussion
#1301381 - 12/08/09 10:39 PM Re: I hate hold policies, however... Trees
Midwest Banker Offline
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Cheeseland
By the first quarter of 2010 all checks, regardless of where you (or they) live and/or are processed from, will be consider local. Your hold policy for case by case holds using local checks is not effective, as it can only be for 2 business days. The only enforceable actions are those under exceptions holds for local checks, which is 7 days. You must have specific reasons for these.

How will your system recognize next day items? I'm not sure what you mean by a case by case strictly coded policy.

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#1301397 - 12/08/09 11:07 PM Re: I hate hold policies, however... Midwest Banker
BrianC Online
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Some institutions that use a blanket case by case may have specially coded deposit tickets for next day items. Of course, then it becomes a training issue for the tellers and personal bankers to use the correct forms.
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#1301439 - 12/09/09 02:45 AM Re: I hate hold policies, however... BrianC
rlcarey Online
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Trees,

"we want to have as a policy "all checks over $5,000. we will hold" (but cust. will get first $100. next day) and then the remaining $4900 after five days."

It would be $100 - next day, $4,900 - 2nd day and the remainder the 7th day. If your competitors aren't doing it, you are going to lose all competitive advantage and your depositors will leave.

What are your current checks losses? How many checks that you currently hold actually come back? Unless your currently getting killed on check losses, this change is not going to have any impact. If you have been getting killed, then you should have moved to this long ago. You still would have to weigh your losses against the tremendous system programing and training costs and customer ill-will that this would cause.

This reaction sounds like an action of a Congressman smile
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#1301554 - 12/09/09 03:01 PM Re: I hate hold policies, however... rlcarey
Trees Offline
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RLC. Losses are driving this potential change to our policy. Coming from people who sign my paycheck. that being said, and in view of your clarification, where we would have to give $4900 the second day, I don't see how we can expect to catch the bogus checks......Are you saying that we can't, as a policy, say what I indicated? What would be the ramifications if we did give the $100. next day but $4900 only in X days (say 5 or more)??? For example, will this be a violation of Reg CC? If yes, based on history of violations and fines, what has been the types of fines handed out? 9I need to build my case against this theory). If the hold scenario does not work, hands down, what alternatives will a bank have, after the great non-local disappearance? What other ways do we have to hold on checks?

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#1301801 - 12/09/09 04:47 PM Re: I hate hold policies, however... Trees
Aggs Offline
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Trees, if you have reason to believe that the item may not be paid, you can do the exception hold (up to 7 days) and just give the customer the notice. But yes, you still have to follow Reg CC and make the $4900 available on the second day. So, in theory, your policy would only be effective for checks in excess of $5,000. Someone depositing a fraudulent check of $5,000 or less will still have access by the second day, unless they are a new customer and you apply the new account hold.

I think a better approach would be enhancing teller training. We had to do this at a previous job because we were being hit with a lot of cashier's check fraud. Train the tellers to question items that don't seem to fit the customer's usual pattern. Question large deposits - saying something simple as "is this a transfer from another account" could lead to the customer saying "no, I sold my car online to some guy and he sent me this check to cover the car and shipping costs".
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#1302000 - 12/09/09 07:30 PM Re: I hate hold policies, however... Aggs
Trees Offline
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Does your scenario change in any way, assuming the non-local concept will disappear? For example, John Doe brings in check drawn on Calif Bank (were in the East) for $8000 on Monday. We give him $100. on Tuesday, $5,000. on Wednesday and $2900 the following Friday...

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#1302010 - 12/09/09 07:36 PM Re: I hate hold policies, however... Trees
Skittles Online
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TN
Assuming? Once all the districts are consolidated to Cleveland there will no longer be any non-local items.
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#1302122 - 12/09/09 08:55 PM Re: I hate hold policies, however... Skittles
Trees Offline
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Well he**. Well, we are really struggling with how to change our policy. One theme that keeps coming up in the threads of bank's with old policies and practices that don't match the policies.

Also, I would be interested in hearing from banks as to whether or not they have some kind of automated back office system scrubbing checks as I suggested may be happening. For example, what kind of policies to the big banks have with respect to large dollar checks drawn on other banks?

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#1307604 - 12/16/09 07:36 PM Re: I hate hold policies, however... Trees
CSpellman Offline
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If you send the item for collection rather than accept it as a deposit, then Reg. CC doesn't apply and you don't have to provide any funds until payment is received.
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#1308119 - 12/17/09 03:12 PM Re: I hate hold policies, however... CSpellman
Trees Offline
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We are using the collection procedure for really sketchy checks. We are simply at a stage where we have become jammed up by bad checks. So, I am struggling with a tough mandate that I know doesn't work from a regulatory standpoint. I need to be able to say that, no, banks are not using an automated back office method scanning routing numbers and assigning holds based on these. Or, scanning for checks in excess of $10,000. (for ex.) and assigning holds on these. Training is fine but we have always had a bit of a significant turnover in tellers. ALso, they have been typically first time jobbers. You can't impose judgment calls on these young folks. They just don't have the experience to sense when something doesn't make sense. So, for those of you associated with a BIG bank, lets hear how you are handling checks, official and otherwise.....

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#1308130 - 12/17/09 03:19 PM Re: I hate hold policies, however... Trees
#Just Jay Offline
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Have you established yet the source of the bad checks, or a pattern of who or where they are coming from? Established customers? New accounts?? Non-customers?? etc...
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