Skip to content

Funds Unavailable - Returning Check

Answered by: 

We have a check for $40,000 which is included in a $48,000 deposit dropped off at our drive-thru. The $40,000 check is written on a customer's account at another bank, but being deposited into his or her account with us. We called to verify funds and the funds were not available. Can we deposit the $8,000 and send the $40,000 check back to the customer in the mail the same day with a letter stating we will not accept it for deposit? What are the compliance issues for doing this? Please reference any regs.

You aren't under any obligation to accept that or any other check for deposit. Pulling it out of the deposit as soon as you learned that funds weren't available to cover it at the drawee bank was an acceptable move, and your notice would probably be considered timely. Considering the dollars involved, it might be wise to attempt calling the customer to inform him of your actions. That would prevent any misunderstandings or incorrect expectations. It also lets your customer know your bank is on top of things. If your customer argues that he's made arrangements to cover the check at the bank where it's drawn, you can tell him to deposit the check when the drawee bank is able to confirm that funds are there to cover it.

First published on 10/15/07

First published on 10/15/2007

Filed under: 
Filed under compliance as: 
Filed under operations as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics