A new checking account was just opened with $48,000 in stale-dated savings bonds. An exception hold was placed for 23 business days.
Isn't the maximum days for a hold 11 business days?
Someone told me that Reg. CC doesn't apply to savings bonds. But I was under the impression that if an item is deposited in a checking account, that Reg. CC is triggered.
Help, please!

Fortunately, you are mistaken.

Review the definition of "check" in Reg. CC, Section 229.2(k). You'll see that savings bonds are not included.

You can also review the Commentary to the Check definition here.

Thank you for responding so promptly.

Then if it doesn't apply to reg. CC, then an exception notice shouldn't even be filled out?
Also, would we be in any violation by placing such a long hold (23 business days)?

Thank you!

It's true that you would not HAVE to provide a notice of the hold you placed. However, both for the sake of consistency and for customer relations, I believe a hold notice is appropriate.

The length of your hold should not be an issue under Regulation CC. I am not aware of any state rule that would address your question.

A comment: Obviously someone in your bank felt there might be a problem with these savings bonds, although the only description you gave is that they were "stale dated" and that there were a lot of them ($48,000). Did you consider at the time the alternative of forwarding the bonds directly to the Fed for payment and crediting your customer's account only once you had received good funds?

John

Comment on the following line from your post....
The length of your hold should not be an issue under Regulation CC. I am not aware of any state rule that would address your question.

Why is the hold length not an issue? I understand it is a new account and therefore the bank is not REQUIRED to notify the customer of the hold (although I agree with you that they should from a customer service standpoint), but I was confused when you say that they can place the exception hold for 23 business days?

It's because the savings bonds being deposited are not subject to Regulation CC at all. Therefore, it matters not (as far as the regulation is concerned) whether or how long one places a hold on the funds represented by the bonds.

Oh.....now I'm with ya!

Also, because savings bonds are not considered checks, they can be returned by the Fed much later than XX business days. I would recommend being extremely cautious when redeeming savings bonds. Make sure you know that the person redeeming the bonds, is indeed the true owner. Do not redeem bonds with a POA!. Send them to the Fed and have them decide if they are ok. An owner or beneficiary could find out much later than 23 days and dispute the bond redemption.