Can we place a hold on a customer's account and state the reason being: "not enough funds in account to cover check"? I do not think this is an acceptable reason under Regulation CC. But what other options do we have in this type of situation?

How do you there aren't enough funds - is it because the check is being returned - which is one reason, or you have information via a call to the payee bank - which is another reason - both of those options shoud be available on your ecxeption hold form -

Case by case hold is applicable.

I guess I didn't clearly state the question. A customer walks into the bank with a check, they want to cash it, but the bank says no, since there is not enough funds in the customers account at our bank to cover the check. So the customer is asked to deposit the check, the bank places a hold on the funds, and the funds are made available at a later date (according to the availability schedule).

The reason we are putting a hold on the account is because our bank customer does not have enough funds in his/her account with our bank to cover the check (if for some reason it would be returned). We do not have any additional reason to think that the check may not be paid. The customer maintains a low balance in his/her account and has been overdrawn a couple of times (but not enough to be considered repeatedly overdrawn). So is it acceptable to place a hold for this particular reason?

Under a case-by-case hold must the bank provide a reason for placing the hold? and is a written notice required under a case-by-case hold? Thanks.

If you place a case-by-case hold, you need not give a reason, but you must provide a notice of the hold.

For a case-by-case hold what availability requirements are banks required to follow?

How long can you hold funds from a local or nonlocal check?

Complygirl,

BankersOnline.com offers easy access on its Alphabet Soup page to each of the lettered regulations of the Federal Reserve System, as well as selected other rules.

Here's a link to our Regulation CC page.