When you receive a check for deposit and you call the paying bank to verify it and they refuse to verify funds, what reason is applicable for an exception hold on that item?!

No more than on any other check you accept. Refusing to verify is different than saying the check is not currently payable.

So is there an acceptable reason to put an exception hold on the check in that case or do we have to find another reason or just take our chances that the check will clear.

If you are that worried about it, send it for collection.

Model Form C-13 contains a practical inventory of the things that might give you reason to doubt a check's collectability. As already noted, the fact that the drawee bank chooses not to verify funds on checks has no logical connection to whether this particular item will be paid.

What is your problem with the check?

Not one particular check...just in general. If a check can't be verified and a customer doesn't have a compensating balance we don't want to accept too much risk.

I have wanted to say this for a long time. Banking is all about accepting reasonable risk. Banks have been accepting checks for deposit without verifying them with the drawee banks for a lot longer than my 67 years racing around the Sun.

That said, every bank needs to determine the limits of risk it will knowingly accept, and occasionally will find it's a good idea to call to try to get verification. But as is pointed out above, if the drawee bank isn't responsive, you have no more or less information about the check than you had before you picked up the phone. So non-response is not a valid excuse for placing a hold.

You'll have to decide whether to accept the check for deposit or not. If you accept it, you'll normally have to provide access by the 2nd business day after the banking day of deposit.

How many checks does your bank get returned daily and how many can you not charge back to a customer's account and you have to take a loss? I know every bank is different, but our few losses come from forgeries not returned checks we cannot charge back to a customer's account.

If the check is $20,000 and the customer's avg YTD is $150 that makes a difference; if the account has been open for only 3 months that makes a difference. Not whether another bank won't verify funds.

Even if you call and the bank says the funds are there at the time you called, the funds could be gone by the time your check is processed or a stop payment could be placed before posting.

To Sherlocked's and John's point - that is why one of the allowable exception hold reasons is the large deposit exception. Basically caps the risk exposure for normal availability at $5,000 which is probably a fairly reasonable level. If the deposit is over $5,000, you can apply the large deposit exception hold for everything over $5,000.

And even more to the point -- If you don't like the odds after trying to get verification you aren't compelled to take the check for deposit. It's a PITA, I admit, but you can accept the check for collection only and deposit only good funds received in response to a collection letter.