I am currently auditing Reg CC and have come across some holds that have been placed incorrectly. This appears to be an ongoing struggle for our tellers (even with case by case holds)and I am curious what others are doing. We have done training and testing, however they answer correctly in these situations. Any suggestions?

How about letting your training and testing replicate the circumstances at the window? Give them 10 "sample"checks, a brief description of the circumstance, the bank's initial disclosure and it's hold notices and let them complete the notices showing the maximum possible hold your bank could impose.

That's a lot tougher than checking "true" or "false" or filling in the blank, but it will give you (and them) an idea of how strong their comprehension is.

Something else that might be helpful is to give your tellers a matrix.

This would have rows with the different types of deposits (cash, treasury checks, on-us checks, local, non-local checks, etc)

The columns would show the number of allowable days for a hold if case by case, exception hold or new account hold is used.

Along with this you could give them a laminated example of the two types of holds with correctly completed information.

We have several guides that spell it out for them, but they seem to go out the "teller window" when the customer is in front of them. I am going to recommend that someone else be checking them for errors. Our bookkeeping department verifies that they are on the system, but apparently they are not checking for accuracy. I am also curious as to whether or not it is the same tellers making the mistakes. I know this reg is confusing, but not getting case by case holds correct is ridiculous. Thanks for your input!

We have the same problem. I decided yesterday to doublecheck the last month's holds and I found very few that were actually correct. I spent two hrs yesterday looking through Bankers Online to find a simple way of explaining it. Finally, I came across this.

http://www.bankersonline.com/tools/gg_regccquickref.pdf

In the search on the home page, I just put Reg CC Holds and I think this was around #34 on the list. It seems really simple to me. We'll see how it goes.

There also is a quick reference chart and hold calendar available at: http://finsolinc.com/compliancetools.htm. Kirchman used to have a good guide available, though you must now be a subscriber to access it.

BOL has other materials (including training materails) under the tools section as well.

Also, Andy Zavoina has a hold calender on his website, however if your bank is like mine it may be behind a firewall. http://home.hot.rr.com/zavoina/Reg_CC.htm

I have used all of the above Reg CC tools (know the author of the one "OVERWHELMED" mentions very well). I've found the one "OVERWHELMED" mentioned to be very useful in getting the tellers to understand what/when/why/how but I also have found that there were fewer errors in counting days when I added Andy Zavoina's calendar. These two tools used together do a very good job.

However you change your training, until you get your tellers are doing it correctly I would recommend you have a supervisor review/approve holds. We require all of our level 1 tellers to have their holds reviewed by their supervisor, and our branch operations managers spot check all holds at their branch. That puts the onus onto the managers who we "should" be able to hold accountable for errors.

Always worries me when a teller (who is responsible for counting cash) can't correctly count out 2, 5, 7, or 11 days holds on the calendar.

Thanks for the suggestions. It worries me too when they can't count 2,5,7,11. Especially since with our system all they have to do is type in the number and the computer figures the rest.

Speaking of Reg CC, I have a question:

When the bank receives notification that a check is coming back and decides to place an exception hold do to "reasonable cause to doubt collectability", when does the clock start ticking for the exception hold? The date of deposit or the date that the bank receives notification?

And does it matter whether or not a hold was originally placed when the check was deposited?

Cite references would be greatly appreciated if possible.

Thought provoking.

I am aware of a bank where senior management got so tired of being criticized for hold issues, they decided no more holds.

Either take the deposit without a hold, send the item for collection or tell the customer to go get cash. I have not heard of them losing many customers or suffering increased chargebacks.

How often does a conforming hold actually save you?


Al

The clock starts from the date of deposit. The cite is 229.13(h)(2) which states that the bank can extend the periods established under 229.10(c) and 229.12 by a reasonable period of time. The time periods established under 229.10(c) and 229.12 are time periods from the date the deposit was received.

That said, the provisions of this cite state that you can extend for a reasonable period. Although the commentary says that 5 and 6 days for local and non-local are presumed to be reasonable extension periods, if your facts support that a longer period would be reasonable you can put it for a longer period. In other words if your hold period from the date of deposit won't get you to the date you know you'll get the check back, then that's not a reasonable hold.

But finally consider this - why place a hold. Based on the notice, why don't you just go ahead and do the chargeback to the account and hold the funds in suspense until the item is returned. This avoids Reg CC holds altogether and the chargeback notice is all the customer need receive.

Thanks for the responses! The issue is this (and I know next to nothing about chargebacks):

What happens if we do the chargeback when we receive the notification, and then don't actually receive the chargeback for, say, two months? Could we then protest it as a late chargeback?

One of the requirements of the notice of exception (229.13(g)(i)) is the time period within which the funds will be available.

How do banks comply with the notice requirements when sending notice of a nonpayment?