A customer presented a check for deposit for about $3k. (This customer had a deposited item that had been returned NSF, different maker.) When this $3,000 check was accepted for deposit, the teller placed a case-by-case hold. The next business day after deposit, we contacted the payee bank and they shared that the check will not be paid. Can we send an updated exception hold notice?

Yes. You now have new information leading you to a reasonable belief the check will bounce, so you can change the CBC hold to an exception hold based on that reasonable belief. Be certain to notify your customer with the appropriate notice. Given the fact that you first told the depositor the CBC hold would be released by the morning of the second business day after the banking day of deposit, and that would be today or tomorrow, I'd also suggest a phone call to give the depositor a "heads up."

Annotate your retained copy of the exception hold notice with the info about the call to the paying bank, which provided the basis for the extended hold.

Thank you!

Remember that the deposit date doesn't change, so the funds will be available by the morning of the 7th business day after the banking day of deposit unless you extend it under wording of the last sentence in 229.13(h) and comment 13(h)-4.