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Home >> Checks/Money Orders >> Checks You Received
Long Hold on My Check: Legal?
I received a check from an attorney for $20,000, drawn from Nevada State Bank. I bank with WaMu. Why do they need to hold my money for eleven business days? I know the check will clear way before that. The lady on the phone also said the government needs to check it. What's up with that?
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 It appears that the WaMu office (now a JPMorgan Chase office) considers the Nevada bank a non-local bank, and that the Chase teller has placed what bankers call an "exception" hold on the deposit. Regulations do permit the bank to delay your access to those funds until the eleventh business day when the bank provides you an appropriate notice of the delay. That notice is required to state the reason for the exception hold.
The hold could be based on the size of the deposit. In such a case, the first $5,000 has to be made available within five business days, and the remaining $6,000 could be delayed until the eleventh day. The bank could hold all of the deposit for eleven days if you have repeatedly overdrawn your account with them, or if the check you deposited had been bounced previously.
Finally, the bank can place an eleven day hold if it has a reasonable doubt that the check will be paid by the Nevada bank. If "reasonable doubt" is given as the reason, the bank has to further explain why it believes the check won't be paid. Some reasons can be considered confidential.
The suggestion that "the government needs to check it" is odd. Unless there is something else going on that isn't included in your question, there's no reason for the government to be involved in the transaction. It's possible the Chase employee had bad information, or was simply trying to come up with something besides "I don't know" in response to your questions.
Chase is not required to shorten its hold, assuming it was correctly placed, to reflect the actual date the $20,000 check is paid by the Nevada bank, but if you can convince Chase to verify final payment of the check, you may also be able to convince them to release the hold early. It's worth a try.
Published on BankingQuestions.com 11/25/08
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