Fed Up with Long Check Hold Times Posted by Michelle at 05/07/07 01:53 PM

Are you tired of waiting for the checks you deposit to clear? In late April 2007, the Federal Reserve Board quietly released a study saying that there are no problems with check hold times. But, we’ve heard from many fed-up consumers that banks are still making you wait too long before you can use money from checks you deposit. Tell Congress the Federal Reserve Board has it wrong! And, tell us your story about check holds.

Check holds mean that even though the money for the checks that you write is leaving your account faster due to electronic processing, you can still face the same long wait to use the money from checks that you deposit. When deposits take longer than the checks you write, this can cause bounced checks, tons of fees, and embarrassment. Tell Congress to reduce check hold times!

If you want to read the Federal Reserve Board study, you can find it here
To share your views on this issue with the Federal Reserve Board,
To complain directly to the relevant federal regulator about the check hold practices of your financial institution, Consumers Union has prepared a link listing the different regulators and how to complain to them.

comments (3)

1 Posted by Meg Goodwin at 05/10/07 05:54 PM

I almost lost a contract to buy property due to the hold time on a check from my investment company. After I deposited the check in my local bank, I was told that I could not access the check for 11 days. My closing was in 2 days and the seller was not willing to wait. So I had to hustle to two other local banks and withdraw money that was to draw quarterly interest in 4 more days! I lost interest on a large sum of money for one quarter, due to the bank holding my check for 11 days. I cannot help but believe that this extended hold time benefits the bank. Are banks allowed to count my money being held in their required reserves? I'll bet the answer is "yes". Politicians look out for big business because the favors and kickbacks are so plentifyl. I used to do accounts payable for a bank. You would not believe the money appropriated for "entertaining" politicians. Deep sea fishing charter boats, liquor, food, beach condo rentals, etc. So why would the politician favor me....I am certainly not going to entertain him so lavishly.

2 Posted by ed dickson at 06/07/07 06:49 AM

First of all, I'm a big advocate of protecting the little guy. I agree that hold times are a problem, but the lack of them is also being taken advantage of by a lot of Internet criminals.

Counterfeit cashier checks are being sent all over the place in the form of lottery, auction, secret shopper, job, reshipper scams (I've probably forgotten a variation, or two).

Unfortunately, the lack of hold times means that if you have an account in good standing, the bank gives you credit.

Ten days later, or so - they come back at you (normally after you've wired the funds, elsewhere) and you are out of luck.

In some cases, the customer was told the check was good, but as always, the bank isn't liable for this.

Just wanted to pass this on as food for thought.

3 Posted by M at 08/30/07 12:33 PM

Eliminate check holds by having people transfer funds to you via ACH or other electronic means. No holds on electronic transfers.

BofA's on-line banking offers the opportunity to transfer funds directly to another person's checking account, at any bank, as long as they give you the routing/transit and account numbers, which are on all checks.