mt6forlife

I have an account with a couple of credit unions. One never gives me shit about anything. They're great. I opened another account at a second CU last summer and they put holds on everything I deposited, even at the counter. This was after offering me a $25k car loan simply for opening the account w/o a credit check. Well now they don't put holds on my deposits at the counter anymore, but they do at the ATM. I'll deposit $600 and they'll put a 1 week hold on $200 of it. It just think its funny that they'll spot me $25k for saying "hi" but they act like my check is suspect when I've been making the same deposit every week and its never come back.

VTEC11

Banks will hold a check until it clears, unless you do an electronic transfer such as direct deposit. With some banks you cannot tell that they are holding the money until the check clears (this is especially true if you have enough money in your account to cover withdrawls). Other banks point out online, that they are waiting for a check to clear before adding the money to your account.

fuzzy02CLS

iTrader: (2)

Most banks will clear a in state check if you have that amount available in your account. Most will hold out of state.
I use Washigton Mutual. Once they tried it, & I went to the counter & asked to release it & they did. Never had another hold on a check.

chef chris

Look up Reg CC on the Fed Reserve site.

Your credit union has rights to hold some types of checks, BUT NOT OTHERS. The fed site will tell you which ones...check it out, they may be breaking the law.

And, FWIW, I know several credit unions who violate these rules on a regular basis in the name of being conservative...but the consumer doesn't know the law so they get away with it.

chef chris

For instance: payroll checks are not allowed to be held & they have to cash the first $100 of a regular check...

...haven't done compliance in a while, but I'm pretty sure of the above.

sipark

Banks hold money so they can make money on interests. Everything they say is a big fat lie.

chef chris

CrockPot

how would this be applicable to checks be held/awaiting deposit into non interest bearing accounts like checking?

scl23

If you are a good and regular customer, and if your banking activity is high enough, they will waive the hold on the spot. I bank with B of A which is the biggest pain in the ass bank with most fees and rules known to man. But it's right by work so I use them. Typically they have a 5 day hold on checks over $5,000 but if you regularly deposit and take out over that much, they will waive the hold if you ask. I know most of the teller girls and the branch manager so they are cool with doing little favors like that for me. Pays to get to know people. I'm such a VIP, they give me a free lollipop each time I go in.

It's also a trust thing. It takes 24 hours for the checks to clear from the other bank but as I said, if you are a good customer, they will just fund the entire amount for you.

DJDZ

Hey Chef Chris,

Actually, payroll checks are subject to Reg CC just as any other checks deposited. But the first $100 must be made available. The only exceptions are the following that are considered "next day" items:

Cash
ACH payments
Certified Bank Checks
US Postal Money Orders
Government Checks
US Treasury Checks

In addition, these checks must be deposited into an account that bears the same name as the payee and must be done in person to be given next day avaliablitiy.

chef chris

Well, it's been about a year since I did any deposit-related compliance stuff & I am suffering from old age...thanks for getting the poop for us.

kensteele

You said at the ATM? My bank makes available at the ATM all of my check deposits the second you insert the envelope. But what's in that envelope? Nothing? If you can turn around and withdraw cash by first inserting and depositing an empty envelope...... I did notice that my ATM now asks if you are inserting cash only, checks only, or both checks and cash. You would be shocked at the amount of atm banking fraud. ATM has no way of know what type of check (payroll, m.o., out of state) you are depositing so I'm not sure if they are subject to the same "teller" rules/banking laws, dj or chris would know.

I know a guy who has been banned from atm deposit with his bank because he's pulled this stunt on multiple ocassions (to prevent overdrafts).

chef chris

Good point...a check is a check though...comes down to what a particular bank deems acceptable and their relationship with that particular client/his history with them/history with other banks or bank fraud.

Banks will take the risk with ATM deposits because they are outweighed by the benefits of clients using the ATMs and the dollar limits imposed by the ATMs themselves. Saves them a ton of time & money by having the client use the self-serve machines. Secondly, the type of client who normally has a self-serve account is NORMALLY of little risk. These are younger people who rely on tech products such as ATMs, direct deposit, internet banking & bill payment.

Really though...the main people who commit fraud(repeat offenders anyhow) are going to pop up on the chex systems reports, credit reports, etc...and they won't normally get the accounts in the first place...they'll just get a savings account, if allowed anything at all.

DJDZ

ATM transactions are also subject to Reg CC funds availability law. The only difference is that a Bank is given one additional day to notify you if a hold will be placed on the funds deposited.

Since the ATM can't physically see what you are depositing, it will limit what you can withdraw from that particular deposit to $100 (per Reg CC the 1st $100 of any deposit is made available the 1st business day after the day of deposit but most banks make it avaliable immediately out of courtesy). If you need to withdraw more money, then the rest must already be available in you account from collected balances.

A typical ATM transaction is processed in the following manner.

1) You make a deposit in the ATM.
2) The deposit is physically removed and verified the following day.
2) If a hold on funds is deemed required, then a hold is placed for the appropriate time frame and a "notice of hold" is mailed to the customer.


Making false deposits in the ATM to avoid an overdraft will definitely cause nothing but problems. You will most likely have your checks returned anyway, get your name into Chexsystems banning you from opening an account at almost every bank, and if the Bank incurs a loss due to a fradulent transaction, you are then subject to legal prosecution. Definitely not worth it!!!

chef chris

Agreed.