WoodForest National Bank Gross Violation Of Reg CC -- Improperly Delaying Funds From Being Credited To Accounts The Woodlands Texas

A few days ago, I got talked into opening a couple accounts at WoodForest National Bank. One business and one personal accounts.

I am a bit gun shy of the large banks at the moment given the crazy economy and the situation at many of the big banks.

I found myself inclined to consider a smaller... local organization... a Texas bank.

So... long story short. I opened up the accounts on Monday. A couple days later... on Wednesday, I swung by to make a deposit into the business account. This was a simple and straight forward Cashiers Check from Frost Bank... drawn by a local branch just down the road... where I myself got the check to move the funds over to WoodForest.

It was late in the day when I dropped into the WoodForest branch. The teller advised that a 7 day business day hold would be placed on the deposit. Given that it was late and no manager appeared to be around... I saw no point in arguing the matter.

Once I got home... I reviewed Reg CC which is published by the Federal Reserve and governs the crediting of deposits. It is binding on the banks that the Federal Reserve regulate/supervise.

And sure enough... right there... in plain English... the Reg states in clear terms that Cashiers Checks are "next-day availability" items. And... with respect to new accounts (accounts less than 30 days old), the first $5000 of any such deposit must be treated as a "next-day availability" item, but any excess can be delayed up to 9 business days.

The Cashier's Check that I deposited was a bit less than the $5000 limit. Thus, under the Regulation... the deposit should not have been held at all. It should have been treated as a "next-day availability" item.

http://www.federalreserve.gov/Pubs/regcc/regcc.htm

I dropped by the Branch today. I was there to make another deposit and to discuss the issue surrounding the hold that was placed on the Cashier's Check.

I got no where. Despite the plain and clear language of the Regulation, the Branch refused to do anything about removing the hold.

I wasn't going to "fight" "yell" or otherwise argue. I left after making my other deposit. After getting home... I called the customer service department for the bank. I talked to a supervisor. She agreed with my understanding of Reg CC. She told me that I needed to return to the branch and discuss it further with them.

I asked to speak with some one with some authority to help me. I was told after sitting on hold for a bit that Jason Stockton, Regional Manager would call me. I never heard from the guy.

I saw no point in returning to the branch so I called the Federal Reserve Bank in Dallas... and talked to their legal department and explained what had happened.

They took my information and advised that they would contact the branch. They phoned me back a bit later and advised that they in fact had talked to the Teller that took my deposit. The Federal Reserve guy told me that the Branch was misapplying the Regulation and that they should have a refresher class regarding Reg. CC. I was told that he was going to be contacting the Branch again to discuss the matter a bit further and to advise them that my deposit should be made available to me on Friday at the latest, which would essentially be "next-day availability".

At this point... I am waiting to see if my money is made available to me tomorrow.

I have to wonder how many other people they have taken advantage of.

I think this matter is actionable. I think WoodForest has liability for their gross violation of Reg. CC.

Oh well.

Beware!! WoodForest seems to play dirty with respect to the crediting of deposits.

Nobleserf
Dallas, Texas
U.S.A.