You can handle non proprietary ATM deposits in a couple of ways.
First, you can disclose in your account disclosures that you hold deposits at non proprietary ATMs until the XXXth business day (up to fifth), if that is the norm for your bank, and if you provide information on how to distinguish non proprietary machines from proprietary machines. Then you don't need to provide any notice at all for a given transaction.
Second, if you normally provide access to funds deposited at non proprietary ATMs sooner than the fifth business day, but want the ability to impose a case-by-case hold to the fifth business day, you need to comply with the requirements §229.16(c)(1) in your account disclosures, and provide a case-by-case hold notice in accordance with §229.16(c)(2). The case-by-case hold notice does not need to indicate the reason for the hold.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8