Okay, here's the scenario. Suzie attempts to deposit a forged check. (The teller called the other bank after the fact and says the account the check is drawn on is closed.) The teller takes the check but holds it out of the work. Would it be necessary to invoke an exception hold and mail Suzie a notice since we still have the forged check?

If you don't process the deposit, it's not really a Reg CC thing.

If you have already given Suzy a receipt for her "deposit," I think you have to contact her (telephone, mail, whatever) to inform her you have not processed the deposit and her account will not be credited. If you told Suzy when she brought the check in that you were not going to process it, no further notice, I guess.

I'd make that call after I contacted the police if the check is big enough to get them involved, and you believe that Suzy is a crook. And if it's > $5K, do the SAR thing.

Yes, invoke an exception hold for the total amount, (you have reason to believe the check will not clear) and mail the notice to Suzie. Mail the check to the drawee bank for collection, or if close by take the check to the drawee bank and when they mark the check account closed you can charge it back to the deposited account.

If the check is "held out," I infer that the deposit was never credited to Suzy's account. Therefore, while you may owe Suzy a notice/letter/call that tells her you've not processed the deposit (which sort of does the same thing the exception hold notice would do, but need not follow the Reg CC rules).

Then, if you submit the check for collection (either by mail or in person) and get turned away, you aren't going to charge it back, because she never got credit.

Or, for that matter, if they have already told you the check is drawn on a closed account (see original post), why bother to submit it for collection at all? Suzy doesn't get credit, you don't do Reg CC, and you don't charge it back. Contact authorities and file SAR if appropriate to the circumstances.

I would only add that if the check is large enough to file a criminal complaint that having the check stamped by the bank " account closed " might go a little further with the police / DA's office then you telling them that Bob at XYZ bank told me that the account was closed.

Thanks for your help!