Our evening hold processing starts with holds being placed in the wee hours of the morning, no funds are made available. By 9 am the item may have a hold on the it, however, for local items $200 is made available. If throughout that business day we then determine no hold needs to be placed due to contacting the maker or maker bank, if we release the hold in the same day do we need to send a notice of hold since "intraday" the client does not have access to the funds other than the $200?

You place mandatory holds on all deposits?

Not all deposited items, only those that alert in our system under the exception rules or other if they meet specific parameters.

So when do you mail the customer a notice of hold??

If the hold remains it goes out in the mail the business day after the hold was place. We also send an email alert notifying the customer that a hold was placed.

Wow. I really am at a loss. I have never heard of a bank processing holds in this manner. What funds availability model disclosure from Appendix C are you providing your customer at account opening?

C2

You tell your customers that funds will be available the next day on all items, unless an exception applies. What information comes to light to the bank overnight that you don't have when the customer makes the deposit in-person at the teller window that allows you to not give a notice of hold right then and there??

229.13(g): The notice shall be provided to the depositor at the time of the deposit, unless the deposit is not made in person to an employee of the depositary bank, or, if the facts upon which a determination to invoke one of the exceptions in paragraphs (b) through (f) of this section to delay a deposit only become known to the depositary bank after the time of the deposit.

We have specific parameters that cause certain items to flag for a hold review, for example the branch may not know if the customer has had previous returned items or repeated overdrafts, depositing in the ATM or mobile channels that are not in person to an employee of the bank. If during that review we suspect an item is counterfeit, altered, or get an early warning, we will place a hold when those facts become known and send NOH. Others we attempt to contact makers throughout the business day to determine if a hold needs to stay on the item that was flagged for review.