Reg CC and Notices sent after the fact

We have a new teller in one of our branch offices who missed a check on which a hold should have been placed. I know hold notices should be given to the customer right away if the transaction is in person, however, do we have any leeway to correct the mistake the next day if it was missed? I never see this area addressed in the reg.

You do have up until the next day but there is a caveat. If the customer is not aware of the hold when he/she leaves the branch they may start writing checks. If these checks are bounced and the check the hold was placed on is paid, then the customer may request his return check charges be reimbursed and you are obliged to do so. It is so much easier if it is done originally. This also would hold true for night drop or ATM deposits.

Here's an excerpt from Federal Reserve Board Special Notice--Compliance with the Expedited Funds Availability Act and Regulation CC

"Give a notice when you delay availability if your policy, for example, is to provide immediate or next-day availability but you retain the right to place a hold on a deposit from time to time (or if you delay a check for longer than the federal schedules based on an allowable exception).

The last category of disclosures includes notices you must give when certain events occur or notices that you have taken certain actions. If you impose case-by-case or exception holds, you must generally give the customer a notice at the time the deposit is made. The notice may be given later in three situations:

(1) if the deposit is not made in person to an employee of your institution;

(2) if the decision to place a case-by-case hold is made after the deposit was made (for example, if it’s made by the teller’s supervisor after the customer has left the branch); or

(3) if you learn of the facts that give rise to an exception hold after the deposit was made."

Quote from 12 CFR 229.16 Timing of notice "The notice shall be provided to the depositor at the time of deposit, unless the deposit is not made in person to an employee of the depository bank or the decision to extend the time when the deposited funds will be available is made after the time of deposit. If notice is not given at the time of deposit, the depository bank shall mail or deliver the notice to the customer not later than the first business day following the banking day the deposit is made" As a side note, I would recommend calling the customer as well. As was pointed out earlier, if the check on hold does not come back, you must reverse any fees that the hold caused if the customer requests it.

These are my opinions and not those of my employer.

Here's our situation. Customer makes ATM deposit, bank decides to place a hold and mails the hold notice to the customer and the procedure is to also telephone the customer that a hold is being placed. Customer is now alledging that she did not receive the hold notice and wants the banks to refund her overdraft fees. What is the bank's obligation for making sure the customer actually received the notice? Is the bank obligated to refund the fees in this instance? Thank you.

3. Overdraft and returned check fees. If a depositary bank delays or extends the time when funds from a deposited check are available for withdrawal on a case-by-case basis and does not provide a written notice to its depositor at the time of deposit, the depositary bank may not assess any overdraft or returned check fees (such as an insufficient
funds charge) or charge interest for use of an overdraft line of credit, if the deposited check is paid by the paying bank and these fees would not have occurred had the additional case-by-case delay not been imposed. A bank may assess an overdraft or returned check fee under these circumstances, however, if it provides notice to the customer in the notice required by paragraph (c)(2) of this section that the fee may be subject to refund, and refunds the fee upon the request of the customer when required to do so.

The requirement to refund NSF fees is if the deposit is made "in person to an employee of the bank" and the notice is not given at that time.

Your ATM should have a sign that says "Funds deposited may not be available for immediate withdrawal." Point out that sign to her.

Our notice is on our deposit envelopes. However, the customer made the comment that she made the deposit at the ATM because she thought she could avoid the hold. Perhaps we need to look at posting a sign as well. Thank you for your help.

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Our notice is on our deposit envelopes. However, the customer made the comment that she made the deposit at the ATM because she thought she could avoid the hold.

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Oh geez.... Translation "I thought I could get around your system by sneaking through the ATM, and now I'm upset that it didn't work like I thought."
Hopefully, you met her statement with an icy-cold unblinking stare....

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Perhaps we need to look at posting a sign as well.

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You should already have this sign. Look at Reg CC 12 CFR-
§ 229.18 Additional disclosure requirements.
(c) Automated teller machines. (1) A depositary bank shall post or provide a notice at each ATM location that funds deposited in the ATM may not be available for immediate withdrawal.

It may just be that you didn't notice you have the sign already!