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#1759047 - 11/19/12 03:52 PM REG CC Exception Hold Reason
mdog76 Offline
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There has been some discussion about what a particular reason means. "The check is drawn on an account with reported overdrafts." Some are seeing this as the account the check is being deposited into.

Thanks for any help.

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#1759053 - 11/19/12 03:58 PM Re: REG CC Exception Hold Reason mdog76
Elwood P. Dowd Offline
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Quote:
The check is drawn on an account with reported overdrafts."


As the phrase appears in Model form C-13 it refers to an item "..drawn on an account with repeated overdrafts." Generally, checks are not "drawn on" the account to which they are deposited.

If the account (customer) to which the item is being deposited is frequently overdrawn, then the basis for the exception hold is "repeat overdrafter" not "reasonable cause to doubt collectibility" as reflected in Model form C-13.
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#1759055 - 11/19/12 04:00 PM Re: REG CC Exception Hold Reason Elwood P. Dowd
mdog76 Offline
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Thats what I thought. Thanks for the help.

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#1759064 - 11/19/12 04:17 PM Re: REG CC Exception Hold Reason mdog76
John Burnett Offline
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On the other hand, if your bank has had lots of charged-back checks issued by Company A, which is a customer of Bank B, you might have a compelling argument that you have confidential information that could lead a reasonable person to doubt the collectibility of a check drawn by Company A on its account at Bank B and deposited by your depositor, Company C. In such a case, IMO you can use a "reasonable doubt" exception hold and cite "confidential information" as the reason for that reasonable doubt. Of course you will need to document on your retained copy or other record of the exception hold the specific confidential information.
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