UNDER THE NEW RULES, HOW ARE STATE & FEDERAL GOVERNMENT TO BE HANDLED. WHAT WOULD BE THE MAXIMUM DAYS YOU COULD HOLD FOR EXCEPTION HOLD OR NEW ACCOUNT?
I THINK I'VE GOTTEN MYSELF CONFUSED.

It was my understanding that state and federal government checks (deposited in person and in account of payee)were always considered 'next-day' and could not be held.

WELL, THAT'S WHAT I THOUGHT BUT THEN RAN ACROSS SOMETHING THAT SAID IF IT'S DUE TO OVER $5000 YOU COULD HOLD FOR 5 DAYS. NOW THIS WAS OLDER INFORMATION SO IT MAY BE INCORRECT.

You can exception hold the excess of $5,000, but I thought that it was just for local/non-local checks, but that state/federal govt checks were immune from this.

The Large Deposit Exception hold applies to any non-cash item being deposited including local checks and next-day checks.

229.13 Exceptions
(b) Large deposits. Sections 229.10(c) and 229.12 do not apply to the aggregate amount of deposits by one or more checks to the extent that the aggregate amount is in excess of $5,000 on any one banking. day.

229.10 (c) is where you have the class of next-day checks.

Previously, if a Next Day item lost it's next day status, then you look to the routing number to determine if a local or non-local exception hold would apply. Treasury checks and Postal Money Orders would always be considered "local", but Cashier's Checks and state/federal checks would go by the routing number.
Now that non-local checks are gone, all Next Day items that lose their next-day status will fall back to a local hold schedule.

Example - customer deposits a Cashier's Check at the ATM. In order to be a next day items, a Cashier's Checks must be deposited in person to the account of a payee. So if it's deposited at the ATM, you can apply a case-by-case local hold.

Example - Customer deposits a Treasury check in the amount of $8,000. You must make $5,000 available the next day, and the remaining $3,000 available after the 7th business day.

The only checks that you cannot extend the hold that long is an "on-us" check which can only be extended by one day since, presumably, you should know if your own check is going to be paid or not.

Princess Rooney, just so that I'm clear, the next-day availability check would first have to 'lose' it's next-day availability (e.g., due to not being deposit in person into account of payee) and THEN a hold can be placed on it. However, as long as it retains it's next-day availabililty, no holds can be placed. Have I got that right? Thanks.

Correct - and there are a few ways that an item loses its Next Day Status.

For instance, Treasury Checks and On-Us checks do not lose Next Day status if deposited at the ATM or by mail (in other words - not deposited in person) but all other next-day checks do.

Also, if an Exception Reason applies, then the Next Day items lose their Next Day Status. The Exception Reasons are:
Large Deposit
Redeposited Check
Repeated OD
Reasonable Cause
Emergency Conditions

For New Accounts, a slightly different set applies to Next Day items:
On-Us Checks are no longer "Next Day"
Travelers Checks are "Next Day"
Next Day items up to $5,000 are Next Day, and any amount above $5,000 can be held for 9 days.

Hold on there. You can place a large deposit hold on the excess over $5,000 of ANY checks deposited to an account, and the funds need not be made available until the 7th BD after banking day of deposit. The first $5,000 has to be made available on its normal 229.10(c) or 229.12 schedule. That includes next-day items.

Yes - I believe that is what I said but it got spread out over two posts.