We have a customer that deposited a check on 2/16/2016. It was returned to us yesterday NSF. The funds are no longer in our customers account to cover this check that was returned. Do we have to follow Reg CC guidelines as far as putting a hold on the account for the collection of the funds? I'm a little confused whether this falls under Reg CC at this point and what our options are. Our operations dept put a hold on the account for the amount of the check for an extended period of time. This overdrew the customers account because the funds are not present. Trying to figure out if this was ok to do or if we should be following a different procedure.

All help is appreciated. I have read the Reg CC guidelines and am only more confused.

Thanks

You need to go back to your operations people and sort out the facts. If the account is overdrawn, it's because they have charged the check back to the account, not because they put a hold on it.

Generally, yes, if your disclosure talks about exception holds and an item is returned NSF you are entitled to an exception hold, if the item is re-deposited. It does not sound like that's what happened here.

Well - they actually put a hold on the account for the amount of the check and with an inactive date of 12/31/2016, because the funds were not available. So am I correct in thinking that we should have actually just charged the check back to the account (processed a withdraw) which in turn would have actually overdrawn the account? And not put a hold on the account?

We have a customer that deposited a check on 2/16/2016. It was returned to us yesterday NSF.

Sounds an awful like a late return to me. How in the world did the collection and return process take so long??

Good question. I have no idea what took so long for this check to be returned. I haven't had a chance to talk to the operations dept yet this morning to find out. Right now I just want to figure out what our exact procedures are when we receive checks back and figure out whether we should have put this hold on the account or not. But I agree with you - it was a long process.

The check should be just debited to the account which will overdraw the account. Why anyone would do otherwise is beyond me.

My thoughts exactly......Thank you!

If the check was processed through the fed; you can file a late return claim with them. You will need to provide the detail of the deposit (date, cash letter and tape totals, sequence # of the item and the items before and after it on the tape) and the details of the return. They do have a form on the fedline to fill out for late return claims.