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Reg CC & Suspense Accounts

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We have knowledge that a customer deposited a State check for a "friend" with a forged endorsement. The State received a copy of the stolen check from us since we were the bank of deposit. We debited our customer's account and credited a suspense account, pending a request from the State for the money. Our dilemma is where do we keep the money? Suspense...We are required to clear this account within 30 days.--Put a hold on the account...Are we violating Reg CC for an indefinite time frame?

If your policy is that you must clear your suspense account within 30 days, your easiest solution might be to put the funds into one of your official (teller's) checks payable to the State, pending receipt of their claim. If something happens that the check doesn't go to them, and has to go somewhere else, simply turn the check over and type on the back "Not used for purpose intended - pay to ............", or "not used for purpose intended, used to purchase check Number......, payable to........." and include your name and title so that your auditors can follow through if necessary. If you put a hold on the account to hold the funds, Murphy's Law prevails - the money will disappear somewhere/somehow.

First published on 5/7/01

First published on 05/07/2001

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