Can we use "Reasonable Cause to Doubt Collectability" exception hold reason when our customer has had an check returned NSF? It does not fit under the "repeated overdraft" exception hold.

Thank You

What is wrong with 229.13(c)?

(c) Redeposited checks. Sections 229.10(c) and 229.12 do not apply to a check that has been returned unpaid and redeposited by the customer or the depositary bank. This exception does not apply--

(1) To a check that has been returned due to a missing indorsement and redeposited after the missing indorsement has been obtained, if the reason for return indication on the check states that it was returned due to a missing indorsement; or

(2) To a check that has been returned because it was post dated, if the reason for return indicated on the check states that it was returned because it was post dated, and if the check is no longer postdated when redeposited.

They want to use "reasonable cause" to place a hold for future deposits because of that one that got returned because it could happen again.

Thank You

you can't blanket use "reasonable cause" for a client for all future deposits because you had one item for them returned...reasonable cause is for the specific item you are holding today and you have been told by the paying bank that the item may not be paid...