Skip to content
BOL Conferences Top Gun 23
Thread Options Tools
#248908 - 09/24/04 07:36 PM Charges when paying against uncollected funds
BBoyd Offline
Diamond Poster
BBoyd
Joined: Mar 2002
Posts: 2,494
MI
Wondered if any of you charge your personal customers if you pay checks against uncollected funds? If so, how much?
_________________________
Opinions are mine and never to be taken as legal advice!

Return to Top
General Discussion
#248909 - 09/24/04 07:41 PM Re: Charges when paying against uncollected funds
Mocha's Mom Offline
Platinum Poster
Mocha's Mom
Joined: Jun 2004
Posts: 633
Western MA
Yes, the same fee for NSF, $25.00.

Return to Top
#248910 - 09/25/04 02:16 PM Re: Charges when paying against uncollected funds
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
How can you charge them the same as an NSF if the funds may be available but only uncollected??
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#248911 - 09/26/04 09:08 PM Re: Charges when paying against uncollected funds
Banker Boy Offline
Member
Banker Boy
Joined: Oct 2003
Posts: 69
Florida
We also charge the same as for NSF ($30.00). This is to discourage the practice of writing checks against uncollected funds. Also, you don't really know if the funds are "good" until they're collected. If the account has overdraft protection, there is no charge for checks drawn against uncollected funds even though the O/D protection account is to be used for NSFs only.

Return to Top
#248912 - 09/27/04 12:05 AM Re: Charges when paying against uncollected funds
Anonymous
Unregistered

Somehow that doesn't seem far to the customer. They put their
deposit in and I'd bet 99% of people have no real idea about
collected or uncollected funds in so far as them paying there bills on what they have in the bank. We give next day unless we put a hold, it just wouldn't be right to then charge them.
In fact in our part of Texas you would not only loose customers but you'd have some mad folks if they got treated like that by their bank.
To each bank his own, I guess

Return to Top
#248913 - 09/27/04 02:35 PM Re: Charges when paying against uncollected funds
Jokerman Offline
10K Club
Joined: Nov 2003
Posts: 12,846
I can't imagine doing this on a consumer account. I can tell you that if it ever happened to MY account, I'd take my business elsewhere immediately.

We charge an uncollected funds fee (3% above prime) on our commercial accounts, but that is pretty common.

Return to Top
#248914 - 09/28/04 01:04 AM Re: Charges when paying against uncollected funds
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Quote:

We also charge the same as for NSF ($30.00). This is to discourage the practice of writing checks against uncollected funds. Also, you don't really know if the funds are "good" until they're collected.




I'm still confused. If the funds are available under Reg CC, how do you assess a drawn against uncollected funds charge?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#248915 - 09/28/04 02:18 AM Re: Charges when paying against uncollected funds
Anonymous
Unregistered

One thing has come to mind as I was reading all the answers.
Maybe these banks don't give next day-maybe they do
just what the max. the rule allows and that's disclosed in their disclosures when the account is set up along with the charge for writing on uncollected funds. Then the customer would be aware of this up front. While I don't like the idea, especially on a consumer account, if its done everyone has been warned & can accept or move account

Return to Top
#248916 - 09/28/04 01:09 PM Re: Charges when paying against uncollected funds
Mocha's Mom Offline
Platinum Poster
Mocha's Mom
Joined: Jun 2004
Posts: 633
Western MA
Unfortunately I have been swamped so I have been unable to return to the forum to defend our position. When a customer makes a deposit we make funds immediately available for cash or ACH. Checks generally are immediately available as well. However, when a float is placed on a check according to Reg CC guidelines this is disclosed to the customer and the Notice of Delayed Availablity is given. If the customer chooses to write a check against funds that they have full knowledge are not available, why shouldn't there be a fee? Isn't this the same as writing a check against insufficient funds? They know the funds are not available whether they are insufficient or uncollected. For our part, we don't even know if the funds are going to be good yet. Are you all saying that you will pay the check not knowing if the funds are going to be good? You might as well be paying an NSF check and not charging a fee.

Return to Top
#248917 - 09/29/04 01:33 AM Re: Charges when paying against uncollected funds
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
There is a big difference between returning a check because it is drawn on funds that are not available due to a Reg CC hold being placed on an account and returning a check because it is drawn on uncollected funds. Most all funds are now collect within two business days and that is soon to be shorter with Check 21.

The definition of the terms of available and uncollected are not the same in the banking world that I know.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#248918 - 09/29/04 02:53 AM Re: Charges when paying against uncollected funds
Anonymous
Unregistered

I also agree there's a big difference in a hold on an account and uncollected funds.
We wouldn't charge a customer when we put a hold on the account. The item may go back, but we aren't charging. We have the funds secure with the hold so if it comes back we'll have our money, in fact we even go so far as to call in a few days to see if ck cleared. If so we take the hold off. Better customer service makes a customer a little more understanding when something does arise that may cause
difficult.
We have had very little problems over the years handling things this way.

Return to Top
#248919 - 09/30/04 02:23 AM Re: Charges when paying against uncollected funds
Banker Boy Offline
Member
Banker Boy
Joined: Oct 2003
Posts: 69
Florida
To clarify, we only charge the fee for checks written against uncollected funds - there is no fee against unavailable funds.

Also, this fee is pretty standard in the NYC area. I didn't say I agree with it being the same charge as for NSF. Personally, I think there should be a charge...perhaps half of what the NSF fee is.

Return to Top
#248920 - 09/30/04 01:49 PM Re: Charges when paying against uncollected funds
Anonymous
Unregistered

We charge same as NSF. How would you know if the funds are going to be collected? What if there is a stop payment on the check or the issuer does not have sufficient funds? If this is common practice in Texas, it is a rather high risk practice.

Return to Top
#248921 - 09/30/04 02:45 PM Re: Charges when paying against uncollected funds
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Quote:

we only charge the fee for checks written against uncollected funds - there is no fee against unavailable funds.




OK - you guys have still lost me here. If you charge a customer for the use of uncollected funds - but not the use of unavailable funds - how to you comply with the availability for withdrawal requirements of Reg CC.

The definitions I'm try to get straight here are unavailable -vs- uncollected.

Unavailable - would mean that a deposit has been made and the bank put a hold on all or a portion of the deposit causing the customer to have funds that are temporarily unavailable. I can understand a charge for drawing on unavailable funds.

Uncollected - would mean that you have not received provisional credit from the institution on which the check was drawn. I cannot understand how you return during this time period based on that fact.

Placing a hold on a deposit does not impact the time it takes to collect an item
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#248922 - 09/30/04 03:16 PM Re: Charges when paying against uncollected funds
LiL Bit Moore Offline
Platinum Poster
LiL Bit Moore
Joined: Nov 2002
Posts: 624
Texas
We are an immediate credit bank that generally only places holds when warranted, so forgive me is this is a stupid quesiton. I would have to beleive that the majority of checks deposited do end up being paid and not returned so aren't you trading check losses for the expense created in customer service issues and refunding those charges if the check is not returned? How much time administratively does this consume? I have never worked in a bank (in 21 years) that does not provide immediate credit. As said earlier, in my area of Texas, it is not a common practice. And, we have never experienced such losses due to charge backs that would warrant a change. I can just imagine the fallout from customers as well as employees if we did!

Return to Top
#248923 - 09/30/04 03:35 PM Re: Charges when paying against uncollected funds
Jokerman Offline
10K Club
Joined: Nov 2003
Posts: 12,846
Quote:

OK - you guys have still lost me here.




Me too. I think anon and bankerboy need to read a summary of Reg CC and then revisit this issue. I can't imagine that their banks are actually doing what they say they're doing.

Return to Top
#248924 - 10/12/04 06:28 PM Re: Charges when paying against uncollected funds
Anonymous
Unregistered

I agree a second look would be in order to determine whether these banks are properly differentiating between available and collected funds. If you tell me in the Funds Availability policy that funds deposited by check are available to me immediately, then you must honor my check-regardless of whether the funds are collected. The exception would be, of course, if you place a Reg CC hold on my deposit. (And to avoid any confusion, I mean honor without a fee.)

Allowing immediate availability on check deposits is a very customer-friendly approach, but it comes with a cost.

We are allowed under Reg CC to pay interest on collected funds (and we should disclose that to our consumers in the TISA).

I really need to know if I have missed something here.

Return to Top