I recently deposited United States Postal Money Orders to my checking account at a credit union in Texas. Can they put a 5 day hold on the funds?
Thx!

Lately there have been many frauds in regards to postal money orders, they don't even have to accept them for deposit. Our bank wouldn't, we would send through collections and once we receive credit for funds, you would. Sometimes that process has taken 30 days. Be thankful it's only 5.

dllk,

This information is from Regulation CC:

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--
(i) A check drawn on the Treasury of the United States and deposited in an account held by a payee of the check;

ii) A U.S. Postal Service money order deposited--
(A) In an account held by a payee of the money order; and
(B) In person to an employee of the depositary bank.

Technically, your bank must give you next-day availability on USPMOs if the criteria in ii) (A)(B) is met. If the bank holds the funds longer, they must have a REASONABLE DOUBT as to the collectibility of the item(s).

Blonde Banker is right. Many banks have taken losses involving bogus money orders. Your bank does not have to accept them for deposit -- or they can send them for collection.

The decision to place a hold usually stems from some concern about the item being deposited or the customer's handling of their account. You need to understand WHY they are holding the funds. If you are a well established customer with no problems managing your account --- talk to someone at a higher level. Try the manager first, if that doesn't work, ask to talk to their Compliance Officer.

Good luck!

If the postal money orders are all for the same amount, often close to $800-$950 and were received from selling something with instructions to wire an overage back, please don't withdraw the funds even if the hold is released. It may take weeks or months for fake money orders to be sent back to the bank and you are ultimately liable for any items you deposit. Releasing a hold does not automatically mean the funds have cleared.

Look at the overall situation, explain it to somebody at your credit union and/or someone here and you should be in good shape. If I had an image of the actual MO's, I could tell you within about 30 seconds if they are counterfeit. Can you describe the situation?

Thanks for your responses. I know they are legit, I bought them. They are playing a float game I guess. They have repeatedly tried to claim they are out of date, I have not only recommended they go to usps.com, but also read to them what it says there about a usps being an undated doc that does not expire after a year. Apparently credit unions write their own rules daily.

To be fair, there are "maverick" banks, too, who sometimes make it up as they go along. It appears you realize that the CU should not have placed a 5 day hold. I'd consider whether my continued use of that institution is worth the hassle to me.

As for the suggestion that an institution might place a "reasonable doubt" hold on a postal money order -- that's patently foolish (on the part of the institution, not the poster!). No exception hold would ever last long enough to protect the institution from a bogus postal money order, since they can take weeks if not months to come back. And one is not permitted to place a "reasonable doubt" hold based on a class of items. In other words, the institution can't have a blanket policy of placing holds on all postal money orders because of increased fraud. They need to have some information about the specific items deposited to place such a hold.