Is there any reason you can't do a large deposit hold on government checks, regardless of whether it is federal, state, or local governments?

In other words, we would provide the first $5000 on the next business day, and the rest on the 7th business day since they are not on us checks?

Government checks are considered cash equivalents. Large Check Exception is not applicable to cash.

Joshua, can you cite where it states that government checks are considered cash equivalents? I was under the impression that exception holds could still be used.

229.10

(c) Certain check deposits--(1) General rule. A depositary bank shall make funds deposited in an account by check available for withdrawal not later than the business day after the banking day on which the funds are deposited, in the case of--


(i) A check drawn on the Treasury of the United States and deposited in an account held by a payee of the check;



(iii) A check drawn on a Federal Reserve Bank or Federal Home Loan Bank and deposited--

(A) In an account held by a payee of the check; and


(B) In person to an employee of the depositary bank;


(iv) A check drawn by a state or a unit of general local government and deposited--


(A) In an account held by a payee of the check;


(B) In a depositary bank located in the state that issued the check, or the same state as the unit of general local government that issued the check;


(C) In person to an employee of the depositary bank; and


(D) With a special deposit slip or deposit envelope, if such slip or envelope is required by the depositary bank under paragraph (c)(3) of this section.

Well I'm a little confused. This link on bankersonline http://www.bankersonline.com/tools/gg_regccquickref030510_sc.pdf
seems to show that you can use an exception hold on government items.

Also, 229.13(b) seems to support that chart.

(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. For customers that have multiple accounts at a depositary bank, the bank may apply this exception to the aggregate deposits to all accounts held by the customer, even if the customer is not the sole holder of the accounts and not all of the holders of the accounts are the same.


I think you're right. We have never held, but according to the very first sentence, I believe you're right.

Yes. The large check deposit hold under 229.13(b) can be used for any deposited check. The first $5,000 of checks deposited will be subject to 229.10 or 229.12 as appropriate, including the $200 next day availability requirement. The excess over $5,000 can be held to the 7th business day.

Thank you both. I appreciate it.