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Home >> My Bank Said ...
Sends Brother Money; Bank gives him Only Half
I sent a check to my brother for $10,000. They took the money from my account, but my brother said his bank just allowed him half of the money. They said he would get the other half in ten more days. Can they do this? It doesn't seem right. It looks like they take half and invest or cover up something. To whom and how can I report this?
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 The bank likely explained to your brother that based on the amount of the check and where it was from, a funds availability hold would be placed on the account until that time expired. Banking regulations allow for these holds to both protect the bank from losses when the checks don't pay, and to expedite receipt of the money deposited, because years ago some banks held funds longer than was necessary.
He should have received a notice to this effect. It isn't a cover up. At 2%, $5,000 would earn less than $2.75 in interest for the bank. They have to complete hold notices, place holds in the system, verify that those holds were placed and released when they were scheduled, etc. The bank doesn't do this for $2.75. They do it to ensure the check is paid as it is supposed to be. There could be funds issues, endorsement issues and other events that slow the payment of the check. The bank is protecting itself and trying to get your brother his money.
Published on BankingQuestions.com 8/07/09
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