Skip to content
GeoDataVision
Thread Options
#665875 - 01/12/07 08:46 PM Returning Check for Uncollected Funds
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,027
A hold is placed on a deposit account and checks come in against the funds being held. The checks are returned stamped NSF. Shouldn't the checks be stamped as uncollected funds? Should the customer have been charged NSF fees when the actual reason for return was due to a hold on the funds in their account?

Return to Top
Deposits and Payments
#666082 - 01/13/07 05:06 PM Re: Returning Check for Uncollected Funds HR Banker
BurntSienna Offline
Diamond Poster
Joined: Aug 2006
Posts: 2,407
Midwest
I would answer your questions as follows: Yes, I think such checks should be returned stamped "Uncollected" not "NSF". No, in my humble opinion, NSF fees should not be assessed on checks returned for uncollected funds.

My bank returns checks for the reason "Uncollected Funds", which is noted in our core software, and our processor (we are outsourced) stamps these checks "Uncollected" and returns them. My bank's policy is to not charge NSF/OD fees if the check is returned for uncollected funds (i.e. the account isn't actually in the negative, but the current collected balance isn't sufficient to cover the funds being drawn by the check).

Of course, to be quite clear, with the customers with accounts marked for "pay on collected funds only", we will still return checks stamped "NSF" and charge them service charges (OD), when/if the account actually goes negative.

Hope this helps.
_________________________
"Gratitude makes sense of our past, brings peace for today, and creates a vision for tomorrow." - Melody Beattie

Return to Top
#666086 - 01/13/07 06:25 PM Re: Returning Check for Uncollected Funds BurntSienna
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
I too agree with the first question, stamp as uncollected.

On the second one, my prior large Chicago/Minneapolis regional bank returned them as uncollected, but still charged the customer the NSF/Uncollected fee, which was $32 when I left them.

I do not agree with this practice. My current bank, we pay checks againest uncollected funds as a courtesy.
_________________________
I don't repeat gossip, so listen closely...

Return to Top
#666112 - 01/14/07 05:38 PM Re: Returning Check for Uncollected Funds #Just Jay
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,697
Cape Cod
Subject to any applicable state law, it's permitted to charge a fee for drawing on uncollected funds, whether the item is paid or not. Of course, you can only do it on a consumer account if you disclose the fee properly.

And I'd make certain your use of the term "uncollected funds" actually refers to funds not subject to a Reg. CC hold.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1397753 - 05/28/10 04:23 PM Re: Returning Check for Uncollected Funds John Burnett
reknab Offline
Gold Star
Joined: Oct 2008
Posts: 258
not where I want to be
What should be used for funds that ARE subject to Reg CC hold.

Return to Top
#1953820 - 08/15/14 08:17 PM Re: Returning Check for Uncollected Funds reknab
river girl Offline
Diamond Poster
Joined: Nov 2004
Posts: 1,005
I know this is an old thread but this is our situation currently.

If we place a hold on a deposit (give $200) and the next day a transaction tries to clear and due to the hold, there isn't enough $ in the account, can we return the transaction as uncollected funds?

The next day the hold falls off and the $ is now available.

Doesn't seem right to return a check just because we chose to place a hold.

Return to Top
#1953825 - 08/15/14 08:26 PM Re: Returning Check for Uncollected Funds river girl
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Back in 1988 your bank could have chosen to be a "delayed availability" institution and held every local check until the second day and every nonlocal check until the fifth day. Apparently, your bank chose not to do that across the board, but reserved the right to do it on a "case by case" basis.

So, when you exercise the right to impose a case by case hold (which has now dwindled to only two days) you are not required to give a reason. "Uncollected funds" is an accounting term and it has no bearing on the basis for the case by case hold whatsoever. (Note John's post above.)

If you are returning the check because of the hold all you have to do is say "Funds subject to hold."

You don't need a reason for a case by case hold and "uncollected funds" is simply a wrong reason for an exception hold. As for the morality of returning a check because you placed a hold, if you followed the rules you told your customer that you were going to do it and he should not have written a check that put you to the test.

If it helps, you're not obligated to send the check back because of the hold, you're just allowed to...give any dispensations wisely as your job may hang in the balance.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1953979 - 08/18/14 02:56 PM Re: Returning Check for Uncollected Funds river girl
SeekingKnowledge Offline
100 Club
SeekingKnowledge
Joined: Jun 2014
Posts: 152
SC
Originally Posted By: river girl
Doesn't seem right to return a check just because we chose to place a hold.


The hold was presumably placed on the deposited funds because the financial institution had a reason to doubt its collectability and exercised its rights under Reg CC. Not returning the check basically nullifies the FI's efforts to protect themselves. The FI is not being mean spirited. As Ken noted, the customer is the one who wrote the check prior to funds becoming available.

Return to Top
#1953993 - 08/18/14 03:17 PM Re: Returning Check for Uncollected Funds HR Banker
RBanker Offline
Power Poster
RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
On the other hand it doesn't seem right for the customer to write the check when told by the bank that they would not be making $x of funds available until a certain date.
Last edited by R Banker; 08/18/14 03:18 PM.
_________________________
My comments are absolutely no reflection of, nor influenced by, my employer - take them at your own risk.

Return to Top
#1954133 - 08/18/14 06:31 PM Re: Returning Check for Uncollected Funds RBanker
RR Sarah Offline
Diamond Poster
RR Sarah
Joined: Mar 2004
Posts: 2,492
Up North
If you are going to make the funds available despite the hold, why place the hold on the funds in the first place?
_________________________
Sometimes you have to burn a few bridges to keep the crazies from following you.

Return to Top
#1975312 - 11/07/14 08:37 PM Re: Returning Check for Uncollected Funds HR Banker
madukes Offline
Diamond Poster
madukes
Joined: Jul 2009
Posts: 1,448
Flyers Country
Our bank usually pays uncollected funds without a fee however our account agreement indicates they are subject to the same fee as if they were nsf.

Return to Top
#1975319 - 11/07/14 08:46 PM Re: Returning Check for Uncollected Funds HR Banker
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,637
Galveston, TX
Uncollected funds???? - what does that have to do with your ability to refuse to pay checks??? Either the funds are available or they are not.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  John Burnett