Report: #134545

Complaint Review: Bank One - J.P. Morgan Chase

  • Submitted: Thu, March 10, 2005
  • Updated: Fri, July 22, 2005
  • Reported By: Valparaiso Indiana
  • Bank One - J.P. Morgan Chase
    Chicago, Kansas
  • Phone:
  • Web:
  • Category: Banks

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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.

Valparaiso, Indiana
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#1 Consumer Comment

The "Alibi" if the check has cleared

AUTHOR: Timothy - (U.S.A.)

The thing is, Wj, that if the check has cleared, and is then contested in "some other way," Bank One isn't affected.

If someone wants to challenge your right to receive those funds after the money has been transferred to Bank One, they will have to take you to court to do so. If they are successful, they will seize whatever funds are left and YOU, not Bank One, will be on the hook for whatever remains.

Protecting themselves from funds withdrawn before they have the money is reasonable. But once they have the money they have little or nothing to worry about. At that point, the hold is no longer reasonable in any sense.
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#2 Consumer Comment

Been there, done that.

AUTHOR: Wj - (U.S.A.)

I went through this a few times in the past year, becuase of my mother's death. As did the rest of my family.

I deposited an IRA check (I was the benificiary of my mother's IRA account) for over $200,000, which my mother told me in advance that I would split with my siblings. The bank put a 5 business hold on the check, because it was "Inconsistant with (my) history of deposites". Both of my siblings had to put up with the same thing when I wrote them checks for their shares. But we were all always assured, that any overdraft fees incurred while the check was on hold, would be waived once the hold was removed.

Yes, of course, we all know that they cleared that check with one phone call, and it is their alibi that they hold it to see if it is contested in any way.

If you owned a bank, or any other place of business, wouldn't you want that kind of that protection against fraudulant transactions?
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#3 Consumer Suggestion

they merged

AUTHOR: Richard Andrew - (U.S.A.)

I curently hold an account with chase, the now "parent" bank of bank once wint they merged july 1, 2004. and being that i live in ohio but opened the account online, my account is considered a ney work opened account. the reason for my post is that all deposits i make into my account, cash, check, ect..... are put on these same holds regardless of type of originating funds or state routing number. sounds like pappa chase made baby bank one adopt the same deposit hold policy when they merged. i would of opened an account at bank one localy but they do not offer a continental airlines debit card, only chase did, and im hoping when the combing of the 2 banks is full and the bank one name disapears that i still will have that card and not be forced to get some outher airlines card.
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#4 Consumer Comment

Amazing. Here is a post that shows how a bank is ripping people off with supporting documentation.

AUTHOR: Cory - (U.S.A.)

A clear, concise intelligent post about a bank's check holding policies. Here is a post that shows how a bank is ripping people off with supporting documentation. Interesting how the item was paid in one day but not credited to your account for what 8 more days. They may try and wezel out, by saying that it was a cashier's check. I don't take bank one checks because of their terrible business practices. As for an attorney, they will spend millions to fight this because they make billions on NSF and late fees. Read someplace today, where half of some banks income now comes from fees. Let us know how it pays out.
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