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#2214099 - 05/21/19 06:15 PM Controlled Release of deposited funds
ns Offline
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Joined: Aug 2016
Posts: 120
We have a private client who deposited a large check. They are requesting the Bank place a hold on the entire check and then each month do a controlled release of a set amount. The check was from their renters for a years worth of rent and each month they only want that months rent to go into their account for accounting purposes. This is such a unique situation and I wanted to get feedback of what I should be concerned about.

I planning on giving guidance that we should not do this but wanted to be able to reference something regulatory if I could. However, it's so unique I'm not sure where to even quote anything from Reg CC. Please help.

Thanks!

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#2214101 - 05/21/19 06:18 PM Re: Controlled Release of deposited funds ns
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,898
Galveston, TX
Sounds like you are taking on the role of a trust agent. Tell them to find someone else to play this game or pass them on to your trust area - if you have a trust charter. The cost of this service should be high also..
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#2214102 - 05/21/19 06:36 PM Re: Controlled Release of deposited funds ns
ns Offline
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Joined: Aug 2016
Posts: 120
Thanks for confirming Randy!

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#2214127 - 05/21/19 08:17 PM Re: Controlled Release of deposited funds ns
burkemi Offline
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Joined: Nov 2013
Posts: 528
If you're wanting something from Reg CC.... where's your reason for the hold? Customer request isn't a listed reason. And if the check hasn't been returned I can't see that a Reasonable Doubt exception can be used. Besides that - you can't hold the funds that long anyway.

Of course, this all assumes the deposit is made to a checking account. If it's a savings account, I just simply agree with Randy.
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#2214134 - 05/21/19 09:09 PM Re: Controlled Release of deposited funds ns
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,898
Galveston, TX
If they are on an accrual based accounting system, it doesn't matter when they get the money because they will not recognize the income until it accrues. If they are not, then they already deposited the check.

They know not what they are doing and the bank does not need to be involved.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2214135 - 05/21/19 09:18 PM Re: Controlled Release of deposited funds ns
MScarn6942 Offline
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Joined: Aug 2015
Posts: 756
Land Lacking in Lakes, IL
If they really want to do something, have them set up an account where only that check is deposited with an automatic transfer set up to move $x each month into the account they're normally using. Agreed that this isn't something you should be doing for them (unless through a trust department).
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