Stop Payment Reasons
10/01/2001
Can a person stop payment because the check will cause them to be overdrawn?
Ken Golliher
Bio:
Ken Golliher is a principal with Pegasus Educational Services, LLC., a training firm organized in 1996 with headquarters in Louisville, Kentucky. Pegasus specializes in technical and regulatory instruction for financial institution personnel. He is an experienced banker with a unique ability to reduce complex legal concepts to plain English. He has explained the "why" and "how" of regulations to thousands of financial institution personnel and examiners. Ken's banking career began in 1972 and includes serving as a teller, commercial operations manager and as trust department legal counsel in a state and a national bank. For ten years he headed the education division of a regional consulting firm for financial institutions. He has served on the faculty of the LSU Graduate School of Banking, the OTS' Level I Compliance School and the FDIC's Advanced Consumer Protection school for examiners. Ken has also been an instructor at compliance schools sponsored by the Illinois, Georgia, Indiana and Nebraska bankers associations.
Areas of Expertise:
Compliance Seminars
Questions Answered
Record Retention Requirement For Checks
10/01/2001
I'm interested in the required record retention on check safekeeping (not imaging).
Restrictive Endorsements
10/01/2001
We had a check that was payable to her and her husband into her individual account. On top of that mistake the teller accepted the check with "deposit only" on the back. The husband is now threatening legal action against us if he doesn't receive the funds and the wife has hired an attorney that says we cannot hold the funds in her account until this is settled. Can we hold the funds, they were deposited three months ago or do we not have the right to hold these funds, her attorney has sent a letter saying he is filing suit if we don't release the funds to her?
Interest Rate Change Notification
10/01/2001
Must we notify our customer when interest rates on deposit products are lowered if, at the time the account is opened, we disclose in writing that rates are subject to change at our discretion?
Overdraft Notice Requirement
10/01/2001
Our commercial officers want to selectively determine who should receive overdraft notices. Can someone direct me to a law or regulation that would provide guidance in this area? Is the bank required (other than by good business practice) to give notice to a customer who is overdrawn if the checks are paid and a fee charged or if the checks are returned and a fee charged?
Holds, Account Balances, and Reg CC
10/01/2001
Customer deposits checks equaling $700 and request less cash of $300 making the total deposit of $400. Can we place a Reg CC hold on the total $700 in checks used to make up the deposit? If a hold is placed for the $700 and places the customer's available funds into a negative balance can items be returned (we pay off of available funds)? Our practice is to use the casebycase hold availability and make funds available next day. If a customer cashes a non on us check can we place a hold on the customer's account for the amount of the check cashed? If so would it be a Reg CC hold?
Required Notice For Large Return Items
10/01/2001
If Institution A plans to return a large item to Institution B, is there any cause or requirement for the Institution A to contact Institution B about the item that is being returned other than the normal return procedures via Fed routing? For instance, if the item is a large amount (over $10,000) it would be beneficial to Institution B to be notified of that as soon as possible (via telephone or fax) to place a hold on those funds in their customer's account.