Returned Check Question

We had a customer deposit a $ 8,869 check and we place a large dollar hold on the check.

On the second day the customer came back and withdrew $5,525.

On the third day the issuing bank return the check as NSF so we have a loss.

What are the timing requirements from the issuing bank in processing the check?

Thanks!

The issuing bank must return the check by the midnight deadline the business day following the check being presented for payment.

Day zero the federal reserve would have received the check from you.
Day one the drawee bank received the check.
Day two the federal reserve receives the check back from the drawee bank
Day three, you get the check back.

Most likely, this return is timely and you will have to pursue your customer to recover the funds they owe you.

Thanks BrianC