If we have a new customer who is depositing a large dollar cashier's check to their account, and there is some reason to doubt collectbility, such as the check is a third party check, can we decide to place an extended hold instead of a new account hold in order to hold the item for a longer period of time? I wasn't sure if the new account rules HAD to be followed if it was a new account, or if we could apply the rules that would result in the greatest protection for the bank.
Thanks,
BC

If more than one exception reason applies you can choose the one that gives you the greatest protection. In this case, it sounds like the reasonable cause hold would give that greatest protection, although I don't know that the mere fact that the check is a third party check gives reasonable cause to doubt collectibility. But it does take the item out of the realm of being an ordinary next day item anyway. In order for a cashiers check to be a next day item it has to be deposited into an account of the payee. If it is a third party item, then it is just the same as any other local or non-local check in terms of availability requirements.

By "third party check" I am assuming you mean the cashiers check is payable to John and he has endorsed it over to your customer, Andy.

Magic's analysis is correct, since it's not being deposited into John's account, it's just another local or nononlocal check. Using the exception hold may be a judgment call, but I would would be comfortable with it.

One of the reasons for an exception hold on model form C-13 is: --We are unable to verify the endorsement of a joint payee. I understand that John is not the joint payee, but if the inability to verify an endorsement constitutes reasonable cause to doubt collectibility in one situation I would readily conclude that it does in another.

P.S. I'm comfortable with the legality of the hold, but it's practicality is limited. In light of the fact that a check can normally be returned for a forged endorsement for up to three years, a maximum possible hold of 11 days doesn't protect you from much.