18.1 Hold Notices, Timing and Consumer Communications

5. Reasonable Cause to Doubt Collectibility (12 CFR § 229.13(e))

• Legal Standard: The bank must possess specific, verifiable facts that warrant a well-grounded belief that the check will not be paid upon presentment.
• Permissible Grounds:
  • The paying bank notified the depositary bank that a stop-payment order has been issued;
  • The paying bank notified the depositary bank that the drawer's account has insufficient funds;
  • The drawer is known to be in bankruptcy or insolvency proceedings;
  • The check is post-dated or stale-dated (more than six months old);
  • The bank has received a verifiable fraud alert or law enforcement notice concerning the specific instrument or account series.
• Statutory Prohibitions: A reasonable cause hold CANNOT be based on:
  • The race, national origin, sex, religion, or age of the depositor;
  • The fact that the paying bank is located in another state or remote geographic region; or
  • The class, category, or industry of the paying institution or check drawer.

6. Emergency Conditions Exception (12 CFR § 229.13(f))

• Operational Triggers: Applies to unforeseen circumstances beyond the bank's operational control, including war, civil unrest, natural disasters (hurricanes, floods, earthquakes), systemic communications or electrical outages, core computer processing failures, or suspension of payments by another bank.
• Availability Rule: Funds must be made available as soon as reasonably possible after the emergency condition ceases, or the ordinary schedule, whichever is later; apply the reasonable-period provisions rather than an absolute five-day maximum.

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Exception Hold Notice Requirements (12 CFR § 229.13(g))

Depository institutions must provide formal written notification to the customer whenever an exception hold is invoked. Failure to provide a timely, accurate hold notice constitutes a statutory violation of Regulation CC.

Notice Timing Rules

• In-Person Deposits: If the deposit is made in person to a bank employee and the bank decides to place the hold at the time of deposit, the notice must be delivered directly to the customer at the counter.
• Delayed Determination or Remote Deposits: If the deposit is made via ATM, mobile RDC, mail, or night depository, or if the facts justifying the exception hold become known after the deposit is accepted, the bank must mail or deliver the notice no later than the first business day following the banking day of deposit (or the first business day following the day facts became known).

Mandatory Notice Contents

Under 12 CFR § 229.13(g)(1), ordinary exception notices contain the following core information; customer contact information is helpful rather than a separately specified sixth mandatory element:

1. Customer Account Number: The identifier of the transaction account debited or credited;
2. Date and Dollar Amount of Deposit: The calendar date and total amount of the deposit transaction;
3. Dollar Amount Subject to Hold: The exact dollar amount of the check(s) being held;
4. Availability Date: The exact calendar date on which the held funds will become available for withdrawal;
5. Specific Statutory Reason: A clear, factual explanation of the specific reason for the hold. Generic or boilerplate statements such as "uncollected funds" or "confidential information" are unlawful violations of § 229.13(g)(1);
6. Customer support: Include helpful contact information as a bank practice.

Confidential Fraud Exception (§ 229.13(g)(1)(iv))

If the hold is based on reasonable cause to doubt collectibility stemming from confidential information that the check is part of a fraudulent scheme, the bank is not required to disclose confidential investigatory details in the notice, but must state that the check is suspected of being fraudulent and must retain full supporting documentation in its compliance files.

Record Retention (12 CFR § 229.21(g))

Institutions must retain complete copies of all exception hold notices, including documented factual justification for all "reasonable cause" holds, for a minimum of two years from the date of the notice.

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Summary Comparison of Statutory Exception Holds

Check the applicable schedule before extending it

The inflation-adjusted amounts effective July 1, 2025 are 275 dollars for next-day availability from ordinary check deposits and 6,725 dollars for the large-deposit, new-account official-check and large-overdraft thresholds. An exception adds a reasonable period; the normal five-business-day extension for ordinary checks is a presumption of reasonableness, not an absolute maximum or automatic authorization for every deposit. On-us and next-day checks have different extension rules. New-account personal checks have no federally specified ninth-day limit; the ninth-day rule applies to excess qualifying official checks. Government and official checks must meet their payee, deposit location and other conditions; Treasury checks have distinct deposit-location treatment. Mobile remote-deposit agreements may be governed differently from physical paper deposits under Subpart B.

Federal Reserve Regulation CC guide.

Notice exceptions and new accounts

Section 229.13(g) has special rules for new-account notices, repeated-overdraft and large-deposit one-time notices for qualifying nonconsumer accounts, and emergency notices in a reasonable form and time. Do not require the same item-specific notice for every exception. New-account cash and electronic payments retain their schedules; the 6,725-dollar cap concerns qualifying official checks, not cash or electronic credits. Deposits of qualifying official checks not made in person generally receive second-day treatment, with the Treasury-check exception. Review the deposit type and conditions before applying an extension.