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Home >> Lending >> Credit Cards
My Credit Union and My Credit Card Check
How long can a credit union legally hold a credit card check? My CU has alternately told me 21 days and 30 days. They claim the reason for such a long hold is because credit card checks take longer to clear then other types of checks. However, in the past, they have always released the hold as soon as the check cleared, which is usually within five days. This time, I deposited a check on 4/19. Discover Card received and approved it on 4/22. The CU is telling me that the money will still not be available until 5/19. Can they legally continue the hold until 5/19, even though they have the money, especially since they haven't in the past because the whole reason was to ensure the check was good? Is 21 to 30 days a reasonable amount of time? It seems absurdly long to me.
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 It does seem absurdly long. In fact, we'll go one better and suggest that it's a violation of federal law and regulations for the credit union to place a hold that long, if you deposited the check to a checking or share draft account.
Credit card checks are subject to the same prompt presentment and payment rules as other checks. While your credit union may have experienced some delays in returns of credit card convenience checks, it is a violation for the credit union to place a hold longer than five business days on a check based on the class or type of check (credit card convenience checks, for example).
Although the credit union certainly can refuse to accept any check for deposit, its treatment of your credit card convenience checks is in our view a blatant violation of the Expedited Funds Availability Act and Federal Reserve Board Regulation CC (which applies to credit unions). It is, in fact, a great example of why that law and regulation were considered necessary to protect customers of depository institutions.
It is entirely possible that an employee of the credit union is placing holds on credit card checks without the knowledge or approval of the credit union's management. Contact management of the credit union and lodge a complaint. If that isn't successful, you should consider filing a complaint with the National Credit Union Administration (see NCUA access information here for federal credit unions or your state banking regulatory body for state credit unions. The NCUA can help you determine whether you are dealing with a federal or state credit union, and give you contact information at the state level if needed.
Published on BankingQuestions.com 5/07/09
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