On March 3 (2005) I presented for deposit a cashier's check, drawn on a local bank, at my local Bank One (where I have an account). In other words, I deposited a cashier's check drawn on a local bank in my checking account.
On March 8 I noted that they had given me a provisional credit for a small portion of the check, but had placed a hold on the remainder of the check. I called the Bank One telephone banking center and was informed that the hold would be lifted on March 11 (8 days, 6 business days after the deposit).
This action is in direct contravention of volume 12 of the Code of Federal Regulations, section 229 (12 C.F.R. 229 (2004) for you fellow legal buffs), also known as Regulation CC. This regulation governs the ability of banks to place hold on checks, and dictates the allowable durations of such holds on funds availability.
Generally, Regulation CC requires that all holds be "reasonable." I contacted the drawee bank on March 9 and was informed that the item was paid on March 4. Even allowing for the slowest method of payment delivery possible, i.e. the U.S. mail, Bank One would have received these funds by March 7. In my opinion, maintaining a hold on an item that has been paid is per se unreasonable.
Also, as this check was drawn on a "local" bank (defined as within the same check processing region), Regulation CC allows for a very limited hold time. If I am not mistaken, it is less than three business days.
Also, as this check was a cashier's check, Regulation CC allows for a hold time only if the depository bank 1) has a reason to believe that the item will not be paid that DOES NOT depend on the type of instrument or the character of the depositor, and 2) gives written notice at the time of deposit of the specific reason for the hold, and the duration of the hols. Neither of these criteria were met. Bank One informed me that the hold was placed because of the potential for forgery of cashier's checks. This justification is in violation of the provision of Regulation CC requiring that holds be placed for reasons other than the nature of the instrument.
I have, generally, been quite displeased with the level of service at Bank One. On March 9 I visited the branch where I made the deposit, informed the branch manager (who was very professional and courteous) that this hold was not only ridiculous (being that it was on a gaurunteed funds instrument, drawn on a local bank, that was paid five days previous to this meeting), but was in violation of federal law. The branch manager agreed to lift the hold at that time. The following day (today, March 10) I checked my account and the hold remained in place. I then called the branch and spoke with the assistant manager (who was also courteous and professional) and she gave me a provisional credit and attempted to remove the hold.
The branch managers have been very helpful in this matter. But corporate policy, it seems, has stimied their efforts to comply with the law.
Regulation CC allows for the following damage awards in the case of a successful private suit: 1) Actual damages (damages incurred as a result of an illegal hold); 2) judicially assessed damages (AKA punitive damages) of not less than $100 and not more than $1000; and 3) plaintiff's attorney's fees. administrative penalties and injunctions may also be assessed.
I will be pursuing legal action against Bank One, J.P. Morgan Chase National Association. Any similarly situated consumers are urged to file a response via the rebuttal box to assist in a possible class action suit. Any attorneys who may have constructive input are also urged to file rebuttals.
Thank you for taking the time to read my report.