Our bank is considering implementing an automated feature in our teller system. Whenever an accountholder cashes a transit check (instead of depositing it), the system will automatically place a hold on their account in the amount of the transit check. This means that we will have "cashed" the transit check and placed a corresponding hold on funds already in the customer's account. However, the hold would only have a duration of less than one business day (it would expire at the end of the business day on which the check was cashed).

We typically make deposits of transit checks available next-day unless an exception is invoked.

We have provided customers with Regulation CC's model clause C-6 in their initial account disclosures, which reads, "If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it." This is exactly what we intend to do.

My question: is there any requirement for us to provide individual notices to individual accountholders each time one of them cashes a transit check and we apply a short-term (1 business day or less) hold in this manner? Or is the notice provided in the initial account disclosures (as model clause C-6) sufficient without needing to give notice every time a transaction is performed?

Please let me know if I can provide any clarifying details. Thanks so much!