For all other checks that are not next-day items on new accounts, can you hold the item(s)up to the 30th business day? I understand there is no $200 that must be made available the next business day.

From the model disclosure:

Special Rules for New Accounts

If you are a new customer, the following special rules will apply during the first 30 days your account is open.

[Redacted]

Funds from all other check deposits will be available on the (number) business day after the day of your deposit.

Take a look at your initial disclosure; your bank supplied the (number). In theory, it could have been as high as "30," but as the hold is only available for the first 30 days, that does not make a lot of sense.

A word of warning: I've seen examiners try to write banks up for putting in a number higher than "7." Obviously, they were not there when the book of Genesis was written for Reg CC.

So, in theory, you could hold up to the 30th business day, releasing the funds on the 30th business day. I'm just trying to figure out the longest time allowed for a new account, especially if an odd situation occurs. At least for me, Reg CC can be very confusing.

Candidly, I don't see that there is any restriction on the number placed in the parentheses in the extract Ken quotes above. In fact, the commentary to section 229.13(a) makes it pretty clear "no holds are barred" (to borrow an incredibly appropriate phrase since we are "wrestling" with this question). Comment 229.13(a)-2.a. reads:

During the new account exception period, the schedules for local and nonlocal checks do not apply, and, unlike the other exceptions provided in this section, the regulation provides no maximum time frames within which the proceeds of these deposits must be made available for withdrawal. Maximum times within which funds must be available for withdrawal during the new account period are provided, however, for certain other deposits.... [Updated to reflect the fact there are no longer any nonlocal checks; emphasis added]

I have no idea why there was no limit placed on the number of days such a check might be held if deposited while an account remains in "new" status. It may be no more complicated than the fact the Congress didn't set any such restriction, in spite of the fact that it micro-managed most of the rest of the rule. The Fed, when it wrote the regulation, however, obviously understood the issue, since it addressed it in Commentary.

All of that said, disclosing and applying an unreasonably long hold period for such checks deposited to new accounts would likely create the sort of clamor that might incite the Fed and Bureau to plug the hole.

So based on the above Commentary, it appears that are no issues with holding an item for 30 business days when related to a new account non-next day item. Obviously there should be some consistency and not hold items for an unreasonably long period.

No, I suggested 30 was the limit. John is indicating that the commentary doesn't even suggest that there is a limit; e.g. make it 75 if you like.

We agree that it's controlled by your disclosure, but I'll try to say a little bit more clearly that 30 would have been ridiculous in 1990. Now, even more so. No new consumer or business customer is going to tolerate that and it is frankly, indefensible as a risk management tool.

Thank you both for your input. I really appreciate it.

On this kind of an issue, would it be legal to set the hold until the check is collected? Or would it make more sense to place the check(s) in collection?

If you are going to place a hold on such checks, you have to disclose the maximum duration of the hold when you open the account. You cannot say the hold will be in place until the check is collected -- unless things have changed in the last few days, a depositary bank isn't notified when a deposited check is paid by the drawee bank.

If you want to ensure the check is good before making funds available, take the check for collection, rather that for deposit, and credit the account when you get the cashier's check for the funds.

IMHO, eleven business days ought to be enough time for deposited checks to be presented and, if not paid, returned to you before the new customer can withdraw them. The occasions on which taking a check for collection is reasonable should be pretty rare.