Situation: Customer calls the bank to have funds transferred from their deposit account at the bank to their reloadable card at the bank. Because there is not an immediate transfer process (tickets are used to process the transfer in nightly processing), a one day hold is placed on the deposit account (the funds are available immediately on the reloadable card). The customer is notified verbally at the time the hold is placed, but no notice of hold is provided to the client.

Banks reasoning: If no hold was placed, the client would have the funds available in their deposit account and on their reloadable card and the bank could incur a loss.

Question: Is a notice of hold required in this instance?

This doesn't directly answer your question (its not my area), but... In a case like this, we would key a memo post entry to the account instead of placing a hold. At processing, the memo would fall off and the tickets would be applied against the account. Is this a possibility on your system? It would avoid any possible notice requirement.

You are not putting a hold on a deposited item; Regulation CC does not apply. As your customer has directed you to take the funds out of the account, he has no basis for claiming "surprise" that the funds are not available.

Thank you - my brain took a vacation for a short amount of time