Hello,

Today I attempted to deposit an out of state Cashier's check (from my father) in the amount of $15,500. My current bank account balance is $3,000. My account has been in excellent standing for six years.

I was told that the check could be deposited, but would be held for 10 days due to possible fraud. After explaining (politely - I always am) that this is a cashier's check, I was told that the original sender could place a 'stop payment' on the check and that's why they need to hold the funds to clear. I explained that the sender can *not* place a 'stop check' on a cashier's check and immediately receive refunded funds without investigation, and neither can the issuing bank without getting into serious trouble. My bank assistant manager informed me that I was mistaken. He refused to provide me with his manager's name and regional manager's name. This was just plain weird.

I called my banks 800 customer service # and reached 3 different supervisors who all insisted that the policy of holds on cashier's checks in excess of $5,000 were due to the 'stop payment' issue.

Next up was the quality assurance line, which did seem somewhat familiar with FDIC guidelines - however, again, she insisted that my cashier's check could run into the 'stop payment' issue and they would be out the money they provided me. The best *they* could do is $5,000 now and $10,000 in 6-11 days.

I asked them to supply me with the specific case-by-case reason for holding the check, and all they can do is read me off their bank policy which they say I signed six years ago that allows them to hold my cashier's check.

Oddly enough it took 15 calls to get someone to 'authorize' the release of a regional managers name (no # still) but I'm working on that one.

I am now still holding my $15,500 that must clear by Friday morning - in my account - in order for my home purchase down payment to clear. If it doesn't, I guess I get sued.

I am going nowhere with my bank (national chain). No one can supply me with anything other than 'we're holding your check because it looks fake'. I almost feel like it's discriminatory at this point, and I've wasted over a days work dealing with this. I can file formal complaints with the fdic or thrift – but I don’t really have time for that.

Secondly, I'm really annoyed with my bank. No one seems to know anything about cashier's checks. How exactly does one go about getting these folks some forced education on banking?

Please assist me in any way possible, thanks.

Jeff

There are several reasons why any bank could put a hold on a cashiers check. One is that there are so many fake cashiers checks being passed now, and even if your bank called the other bank its a good chance your dads bank would not vouch for it validity.

Stop payment can be put on Cashiers checks, but it is an involved process and not often done. Personally, its not a reason I would use to tell you a hold was being placed.

The larger the dollar amount of an item the more precautions a bank will take.

A bank does not have to give you immediate credit on items you deposit. They do have to follow rules regarding when they have to release funds, and how long the holds can be placed. A real problem is the fake cashiers checks often take longer to get returned than the number of hold days allowed.

Have you read the number of posts here where people want to hold the bank responsible because the hold was released and they spent the money. Now the check has been returned and the bank has requested they pay it back. However the customer does not have the funds to repay and feels because the bank let them have the money its the banks fault and they shouldn't have to repay it.

So a bank is between a rock and a hard place on what they do. Because they don't want hundreds of individual employees making judgement calls and to have some equal treatment for all customers, a policy is put in place, and people in branch offices follow the policy. To get an exception to policy you have to do what you did, and dig through through the management levels to find a person who can.

Your best bet in the future is have your dad wire transfer funds to your account. This a between banks process that validates funds, and a hold would not be placed. Of course, expect to pay your banks wire transfer fee to receive the funds, and your dad to pay a fee to his bank for sending it.

As far as your escrow closing call the title company or who ever is handling the closing. Tell them what has happened. You may have to pay additional funds for the extra days to closing. I don't know what the seller closing instructions are but generally its an inconvenience that one can overcome. Hassle? yes

I don't excuse the run around you received at all. An officer of the bank refusing to tell you who their boss is a display of total immaturity. Now that you see the professional level you can expect, perhaps its time to shop around for another bank.

Just so you can see the actual citation regarding the availability of the cashier's check:

"Regulation CC

Sec. 229.10 Next-day availability.
(c) Certain check deposits--(1) General rule. A depositary bank shall make funds deposited in an account by check available for withdrawal not later than the business day after the banking day on which the funds are deposited, in the case of--

(b) Large deposits. Sections 229.10(c) and 229.12 do not apply to the aggregate amount of deposits by one or more checks to the extent that the aggregate amount is in excess of $5,000 on any one banking. day. For customers that have multiple accounts at a depositary bank, the bank may apply this exception to the aggregate deposits to all accounts held by the customer, even if the customer is not the sole holder of the accounts and not all of the holders of the accounts are the same."

If you cannot make arrangements with the title company/seller regarding the payment of funds from this check, perhaps you can arrange to overnight it back to your father and he can wire the funds to you Friday. Those would be what is referred to as "good funds" subject to immediate availability.

It is a shame the bank wouldn't even have a real conversation with you regarding this check. They could have contacted the other bank to confirm that they check was good. Perhaps the local branch is not authorized to do this, but someone in management normally would be.

But your bank may not be compiant with the regulation that kaybee cited. I am presuming that the cashier's check was issued to you and deposited into an account in your name.

That means the item meets the definition of one requiring "next day" availability under the regulation. That is, normally you should receive availability of all the funds the business day after you deposit them.

The hold for large items applies to amounts deposited in excess of $5,000 in any one banking day. The regulation says the bank can hold the funds for a "reasonable" period of time. However, the regulation also indicates that a "reasonable time" for an item with next day availability is one additional business day.

So, now you need to call the branch manager again. Tell him/her that the large item hold placed on the deposit exceeds the reasonable time frame established under 229.13(h), and that the bank needs to justify the additonal time.

Also explain to the manager what the funds are going to be used for. He/She may authorize an overdraft to your account for the drawing on uncollected funds.

If the bank does not give you the use of the funds, and it costs you your house, you may then have an action against the bank for a violation of the Expedited Funds Availability Act. Under the Act, you may be entitled to receive actual damages plus attorney's fees.

Good luck.

Actually, Redsfan, you might want to read that 229.13(h) reference a little closer. The one day "reasonable period" only applies to the checks in 229.10(c)(1)(vi) -- on-us items.

The "large item" hold on amounts in excess of $5,000 is 7 business days (total) for local checks, and 11 business days for non-local checks. And it applies to the excess over $5000 of cashier's checks, too. So the hold appears to be legal based on what we're told here, even on a cashier's check.

If you are talking about Wells Fargo Bank, I had a similar issue that happened to me personally on a cashiers check MUCH LESS than yours. Mine was for $2600.00. I needed to use the funds from my cashiers check (payable to ME) and funds from my account to purchase a NEW cashiers check payable to the IRS. Even though I have been a customer of theirs for over 11 years, they still would not do it. They told me the same thing (the check must clear FED before we can release it, so you must deposit it tonight then come in tomorrow morning and you can do the other check). OK, FED will NOT get the check in one night. Even ifyou do check 21. UUGGHHH I understand your pain!!

wait a minute...I'm a little confused...I thought you could NOT put a STOP PAYMENT on a cashier's check!!??!! Isn't that correct?

I understand about the funds availability holds discussed above (large item), but in reading the original post, it seems to me that Jeff27 is saying that either they are not giving availability because there "might be a stop payment on it and they would be out the funds" OR "it looks fake".

A bank that refuses payment on its own cashier's check does so at its peril unless it has a defense against the person entitled to enforce payment. That means that a bank can stop payment on its own cashier's check, for example, if it erred and issued a check for more than the balance in an account to the account owner (in order to close the account), but that stop payment is only effective if the payee presents the check for payment. If the check is presented by a holder in due course, the bank has no defense to payment, and therefore cannot refuse payment without becoming liable not only for the amount of the check but also costs of collection, etc.

In all states except South Carolina, the payee or remitter of a cashier's check can complete a claim and declaration under section 3-312 of the UCC (section 4-403 in New York) that the check has been lost, stolen or destroyed. The claim matures 90 days from the date of the check. Once the claim is mature or effective, the issuing bank pays the claim if the check has not yet been paid, and is thereafter discharged on the check. In that case, the drawee bank can refuse payment on the original check, citing the payment of the claim.

In New York, that process is referred to as "stopping payment."

The bank in question in this thread, in referring to a stop payment, is blowing smoke.

ok...I get that!

(and I was thinking the same thing about the bank in this situation... just got a little confused with all the "stop pay" talk...just a difference in terms, I guess )

Thank you for the clarification

Jumping on a tangent here...
I am a fan of putting a hold on anything possible, at the same time, the public (or those who have not been directly or indirectly involved in some type of fraudlent item) are still under the impression that those items which used to be known as "certified funds" are as good as cash.
I think we as an industry have some responsibility in the sale of said items to explain to the purchaser what some of the possible outcomes can be, and discuss some alternative methods of delivery...

I just wanted to add something. In the future, you should never write a check for funds you haven't actually deposited into your account yet. It is always best to be sure the money is in your account and available before you write a check. A lot of people make this mistake, assuming the paycheck will arrive as it always does for example, but if something was to go wrong, you've written a hot check. It's always a good idea to be careful about that.

Hi,

I thought I would post a quick follow-up. Thanks, first off, for all of your responses. After discussing 229.13(h) with my bank's branch asst. manager (who is an unprofessional jerk for lack of better word), I was told again that the bank's regulations were 6-11 days. After asking for his manager, I was informed that she was not available. Asking for a regional manager - I was informed that the bank is not allowed to give that information out to customers.

I spoke again to their quality assn. team again at their executive offices regarding 229.13(h) and was told that the issue is closed. The only folks able to discuss such matters was their legal execs who do not speak with customers directly either.

Truth be told, anytime I would mention any regulation I was treated like a complete idiotic nuisance, regardless of my politeness and general professionalism. I was told over and over that the bank’s guidelines are what “they have to follow”. When I asked if those guidelines supersede FDIC regulations and was told that they could not answer that (from 5 different phone managers). One customer service rep actually sent me to a branch to meet with another manager in which I waited an hour for before being told that she wasn't available to help me. More waste of my time.

These folks cost me 2 days of work and almost cost me my new home. Although I'm not a bitter sort of guy - there's no reason why a national bank should treat someone this way. It's very annoying to be treated like a fraud and not provided with any information as to who to contact regarding a legitimate concern. I would like to file formal complaints outside of my bank regarding this but I need to know what to do?

Now on to the good part. I went to my other bank where my business accounts are held and explained the situation. They quickly called the issuing bank to verify and provided me with the full amount in cash. I went back across the street and personally asked for the same asst. manager. I gave him $15,500 in cash and told him I needed the funds available immediately. He started shaking. He told me that there is a hold on cash deposits as well. "You've got to be kidding me" - "Oh yeah, I am". Really professional. So he took my deposit and the check cleared yesterday. All is well as far as my home purchase.

I left a message for his manager and received no callback. I also left a follow-up message for the exec offices quality assurance team but I must be blacklisted from there as well. I'll be switching banks shortly over to my business bank (which is a credit union).

Funny - the asst manager told me "Well credit unions have different rules regarding cashier's checks, they can do those things". Whatever.

Is there a formal complaint I can file with the FDIC or something in order to prevent this nightmare from happening again? Or does anyone know of any strategy to speak with a higher-up exec at a large national bank?

Thanks,
Jeff

I had a problem with a phone company, (largest in US at that time). I experienced the same sort of run around, ineptitude, arrogance and ignorance. I sent a letter to the chairman of the board. It was resolved in 48 hours and I got two calls from his assistant to make sure I was satisfied. I tried the regular channels as you did and got no resolution.
As to regulators, I am sure you can alert the regulators of this bank of your experience, I suggest in writing with dates and names, for their review.
Congratulations on your new home.

Glad you got your money..sorry for the awful experience. You should write to the President of the entire banking company. Those large banks usually have an "office of the president" special customer service unit. Complain and tell them you are moving your account. Also you can write to their regulator. If the word national is in their name or the letters N.A. is after their name, it is the OCC.

In spite of the fact that this site is primarily directed toward bankers, I agree that your description of how you were treated speaks volumes about shoddy customer service and miserable customer skills. That sort of treatment reflects poorly on the bank, and troubles anyone who cares at all about professionalism in the industry.

You mentioned in your most recent post that the institution in question is a national bank. Here is a link to the Consumer page at the OCC, which would be the bank's primary regulator. There's a link on the page for filing a complaint.

which is more higher and powerful in a bank a credit officer or a quality assurance officer

These are functional titles, not necessarily corporate titles conveyed on actual officers of the bank by its board of directors. They could both be assistant vice presidents or vice presidents, who knows?

Neither of the titles you mention sound very "powerful" to me. Just my opinion.