SECTION 229.13—Exceptions
A. Introduction1. While certain safeguard exceptions (such as those
for new accounts and checks the bank has reasonable cause to believe
are uncollectible) are established in the EFA Act, the Congress gave
the Board the discretion to determine whether certain other exceptions
should be included in its regulations. Specifically, the EFA Act gives
the Board the authority to establish exceptions to the schedules for
large or redeposited checks and for accounts that have been repeatedly
overdrawn. These exceptions apply to local and nonlocal checks as
well as to checks that must otherwise be accorded next-day (or second-day)
availability under section 229.10(c).
2. Many checks will not be returned to the depositary
bank by the time funds must be made available for withdrawal under
the next-day (or second-day), local, and nonlocal schedules. In order
to reduce risk to depositary banks, the Board has exercised its statutory
authority to adopt these exceptions to the schedules in the regulation
to allow the depositary bank to extend the time within which it is
required to make funds available.
3. The EFA Act also gives the Board the authority
to suspend the schedules for any classification of checks, if the
schedules result in an unacceptable level of fraud losses. The Board
will adopt regulations or issue orders to implement this statutory
authority if and when circumstances requiring its implementation arise.
9-161
1. Definition of New Account a. The EFA Act provides an exception
to the availability schedule for new accounts. An account is defined
as a new account during the first 30 calendar days after the account
is opened. An account is opened when the first deposit is made to
the account. An account is not considered a new account, however,
if each customer on the account has a transaction-account relationship
with the depositary bank, including a dormant account, that is at
least 30 calendar days old if each customer has had an established
transaction account with the depositary bank within the 30 calendar
days prior to opening the second account.
b. The following are examples of what constitutes,
and does not constitute, a new account:
i.
If the customer has an established account with a bank and opens
a second account with the bank, the second account is not subject
to the new account exception.
ii.
If a customer’s account were closed and another account opened
as a successor to the original account (due, for example, to the theft
of checks or a debit card used to access the original account), the
successor account is not subject to the new account exception, assuming
the previous account relationship is at least 30 days old. Similarly,
if a customer closes an established account and opens a separate account
within 30 days, the new account is not subject to the new-account
exception.
iii.
If a customer has a savings deposit or other deposit that is not
an account (as that term is defined in section 229.2(a)) at the bank,
and opens an account, the account is subject to the new-account exception.
iv.
If a person that is authorized to sign on a corporate account (but
has no other relationship with the bank) opens a personal account,
the personal account is subject to the new-account exception.
v.
If a customer has an established joint account at a bank, and subsequently
opens an individual account with that bank, the individual account
is not subject to the new-account exception.
vi.
If two customers that each have an established individual account
with the bank open a joint account, the joint account is not subject
to the new-account exception. If one of the customers on the account
has no current or recent established account relationship with the bank, however,
the joint account is subject to the new-account exception, even if
the other individual on the account has an established account relationship
with the bank.
9-162
2. Rules Applicable to
New Accountsa. During the new-account
exception period, the schedules for local and nonlocal checks do not
apply, and, unlike the other exceptions provided in this section,
the regulation provides no maximum time frames within which the proceeds
of these deposits must be made available for withdrawal. Maximum times
within which funds must be available for withdrawal during the new-account
period are provided, however, for certain other deposits. Deposits
received by cash and electronic payments must be made available for
withdrawal in accordance with section 229.10.
b. Special rules also apply to deposits
of Treasury checks, U.S. Postal Service money orders, checks drawn
on Federal Reserve Banks and Federal Home Loan Banks, state and local
government checks, cashier’s checks, certified checks, teller’s
checks, and, for the purposes of the new-account exception only, traveler’s
checks. The first $5,525 of funds deposited to a new account on any
one banking day by these check deposits must be made available for
withdrawal in accordance with section 229.10(c). Thus, the first $5,525
of the proceeds of these check deposits must be made available on
the first business day following deposit, if the deposit is made in
person to an employee of the depositary bank and the other conditions
of next-day availability are met. Funds must be made available on
the second business day after deposit for deposits that are not made
over the counter, in accordance with section 229.10(c)(2). (Proceeds
of Treasury-check deposits must be made available on the first business
day after deposit, even if the check is not deposited in person to
an employee of the depositary bank.) Funds in excess of the first
$5,525 deposited by these types of checks on a banking day must be
available for withdrawal not later than the ninth business day following
the banking day of deposit. The requirements of section 229.10(c)(1)(vi)
and (vii) that on-us checks and the first $100 of a day’s deposit
be made available for withdrawal on the next business day do not apply
during the new-account period.
9-163
3. Representation by Customer The depositary bank may rely on the representation of the customer
that the customer has no established account relationship with the
bank, and has not had any such account relationship within the past
30 days, to determine whether an account is subject to the new-account exception.
4. Dollar Amount Adjustment See section 229.11 for the rules
regarding adjustments for inflation every five years to the dollar
amounts in this section.
9-164
1. Under
the large-deposit exception, a depositary bank may extend the hold
placed on check deposits to the extent that the amount of the aggregate
deposit on any banking day exceeds $5,525. This exception applies
to local and nonlocal checks, as well as to checks that otherwise
would be made available on the next (or second) business day after
the day of deposit under section 229.10(c). Although the first $5,525
of a day’s deposit is subject to the availability otherwise
provided for checks, the amount in excess of $5,525 may be held for
an additional period of time as provided in section 229.13(h). When
the large-deposit exception is applied to deposits composed of a mix
of checks that would otherwise be subject to differing availability
schedules, the depositary bank has the discretion to choose the portion
of the deposit to which it applies the exception. Deposits by cash
or electronic payment are not subject to this exception for large
deposits.
2. The following example illustrates the operation
of the large-deposit exception. If a customer deposits $2,000 in cash
and a $9,000 local check on a Monday, $2,225 (the proceeds of the
cash deposit and $225 from the local-check deposit) must be made available for withdrawal
on Tuesday. An additional $5,300 of the proceeds of the local check
must be available for withdrawal on Wednesday in accordance with the
local schedule, and the remaining $3,475 may be held for an additional
period of time under the large-deposit exception.
3. Where a customer has multiple accounts
with a depositary bank, the bank may apply the large-deposit exception
to the aggregate deposits to all of the customer’s accounts,
even if the customer is not the sole holder of the accounts and not
all of the holders of the customer’s accounts are the same.
Thus, a depositary bank may aggregate the deposits made to two individual
accounts in the same name, to an individual and a joint account with
one common name, or to two joint accounts with at least one common
name for the purpose of applying the large-deposit exception. Aggregation
of deposits to multiple accounts is permitted because the Board believes
that the risk to the depositary bank associated with large deposits
is similar regardless of how the deposits are allocated among the
customer’s accounts.
4. Dollar amount adjustment. See section
229.11 for the rules regarding adjustments for inflation every five
years to the dollar amounts in this section.
9-165
1. The
EFA Act gives the Board the authority to promulgate an exception to
the schedule for checks that have been returned unpaid and redeposited.
Section 229.13(c) provides such an exception for checks that have
been returned unpaid and redeposited by the customer or the depositary
bank. This exception applies to local and nonlocal checks, as well
as to checks that would otherwise be made available on the next (or
second) business day after the day of deposit under section 229.10(c).
2. This exception addresses the increased risk to
the depositary bank that checks that have been returned once will
be uncollectible when they are presented to the paying bank a second
time. The Board, however, does not believe that this increased risk
is present for checks that have been returned due to a missing indorsement.
Thus, the exception does not apply to checks returned unpaid due to
missing indorsements and redeposited after the missing indorsement
has been obtained, if the reason for return indicated on the check
(see section 229.30(d)) states that it was returned due to
a missing indorsement. For the same reason, this exception does not
apply to a check returned because it was postdated (future-dated),
if the reason for return indicated on the check states that it was
returned because it was postdated, and if it is no longer postdated
when redeposited.
3. To determine when funds must be made available
for withdrawal, the banking day on which the check is redeposited
is considered to be the day of deposit. A depositary bank that made
$100 of a check available for withdrawal under section 229.10(c)(l)(vii)
can charge back the full amount of the check, including the $100,
if the check is returned unpaid, and the $100 need not be made available
again if the check is redeposited.
9-166
1. The
EFA Act gives the Board the authority to establish an exception for
“deposit accounts which have been overdrawn repeatedly.”
This paragraph provides two tests to determine what constitutes repeated
overdrafts. Under the first test, a customer’s accounts are
considered repeatedly overdrawn if, on six banking days within the
preceding six months, the available balance in any account held by
the customer is negative, or the balance would have become negative
if checks or other charges to the account had been paid, rather than
returned. This test can be met based on separate occurrences (e.g.,
checks that are returned for insufficient funds on six different days),
or based on one occurrence (e.g., a negative balance that remains
on the customer’s account for six banking days). If the bank
dishonors a check that otherwise would have created a negative balance,
however, the incident is considered an overdraft only on that day.
2. The second test addresses substantial overdrafts.
Such overdrafts increase the risk to the depositary bank of dealing
with the repeated overdrafter. Under this test, a customer incurs
repeated overdrafts if, on two banking days within the preceding six
months, the available balance in any account held by the customer
is negative in an amount of $5,525 or more, or would have become negative
in an amount of $5,525 or more if checks or other charges to the account
had been paid.
3. The exception relates not only to overdrafts caused
by checks drawn on the account, but also overdrafts caused by other
debit charges (e.g., ACH debits, point-of-sale transactions, returned
checks, account fees, etc.). If the potential debit is in excess of
available funds, the exception applies regardless of whether the items
were paid or returned unpaid. An overdraft resulting from an error
on the part of the depositary bank, or from the imposition of overdraft
charges for which the customer is entitled to a refund under sections
229.13(e) or 229.16(c), cannot be considered in determining whether
the customer is a repeated overdrafter. The exception excludes accounts
with overdraft lines of credit, unless the credit line has been exceeded
or would have been exceeded if the checks or other charges to the
account had been paid.
4. This exception applies to local and nonlocal checks,
as well as to checks that otherwise would be made available on the
next (or second) business day after the day of deposit under section
229.10(c). When a bank places or extends a hold under this exception,
it need not make the first $100 of a deposit available for withdrawal
on the next business day, as otherwise would be required by section
229.10(c)(1)(vii).
5. Dollar amount adjustment. See section
229.11 for the calculation method used to adjust the dollar amounts
in this section every five years.
9-167
1. In the case of certain check deposits, if the
bank has reasonable cause to believe the check is uncollectible, it
may extend the time funds must be made available for withdrawal. This
exception applies to local and nonlocal checks, as well as to checks
that would otherwise be made available on the next (or second) business
day after the day of deposit under section 229.10(c). When a bank
places or extends a hold under this exception, it need not make the
first $100 of a deposit available for withdrawal on the next business
day, as otherwise would be required by section 229.10(c)(1)(vii).
If the reasonable-cause exception is invoked, the bank must include
in the notice to its customer, required by section 229.13(g), the
reason that the bank believes that the check is uncollectible.
2. The following are several examples of circumstances
under which the reasonable-cause exception may be invoked:
a. If a bank received a notice
from the paying bank that a check was not paid and is being returned
to the depositary bank, the depositary bank could place a hold on
the check or extend a hold previously placed on that check, and notify
the customer that the bank had received notice that the check is being
returned. The exception could be invoked even if the notice were incomplete,
if the bank had reasonable cause to believe that the notice applied
to that particular check.
b. The depositary bank may have received information
from the paying bank, prior to the presentment of the check, that
gives the bank reasonable cause to believe that the check is uncollectible.
For example, the paying bank may have indicated that payment has been
stopped on the check, or that the drawer’s account does not
currently have sufficient funds to honor the check. Such information
may provide sufficient basis to invoke this exception. In these cases,
the depositary bank could invoke the exception and disclose as the
reason the exception is being invoked the fact that information from
the paying bank indicates that the check may not be paid.
c. The fact that a check is
deposited more than six months after the date on the check (i.e.,
a stale check) is a reasonable indication that the check may be uncollectible,
because under UCC section 4-404 a bank has no duty to its customer
to pay a check that is more than six months old. Similarly, if a check
being deposited is postdated (future-dated), the bank may have a reasonable
cause to believe the check is uncollectible, because the check may
not be properly payable under UCC 4-401. The bank, in its notice,
should specify that the check is stale-dated or postdated.
d. There are reasons that may
cause a bank to believe that a check is uncollectible that are based on confidential
information. For example, a bank could conclude that a check being
deposited is uncollectible based on its reasonable belief that the
depositor is engaging in kiting activity. Reasonable belief as to
the insolvency or pending insolvency of the drawer of the check or
the drawee bank and that the checks will not be paid also may justify
invoking this exception. In these cases, the bank may indicate, as
the reason it is invoking the exception, that the bank has confidential
information that indicates that the check might not be paid.
3. The Board has included a
reasonable-cause exception notice as a model notice in appendix C
(C-13). The model notice includes several reasons for which this exception
may be invoked. The Board does not intend to provide a comprehensive
list of reasons for which this exception may be invoked; another reason
that does not appear on the model notice may be used as the basis
for extending a hold, if the reason satisfies the conditions for invoking
this exception. A depositary bank may invoke the reasonable-cause
exception based on a combination of factors that give rise to a reasonable
cause to doubt the collectibility of a check. In these cases, the
bank should disclose the primary reasons for which the exception was
invoked in accordance with paragraph (g) of this section.
4. The regulation provides
that the determination that a check is uncollectible shall not be
based on a class of checks or persons. For example, a depositary bank
cannot invoke this exception simply because the check is drawn on
a paying bank in a rural area and the depositary bank knows it will
not have the opportunity to learn of nonpayment of that check before
funds must be made available under the availability schedules. Similarly,
a depositary bank cannot invoke the reasonable-cause exception based
on the race or national origin of the depositor.
5. If a depositary bank invokes this exception
with respect to a particular check and does not provide a written
notice to the depositor at the time of deposit, the depositary bank
may not assess any overdraft fee (such as an NSF charge) or charge
interest for use of overdraft credit, if the check is paid by the
paying bank and these charges would not have occurred had the exception
not been invoked. A bank may assess an overdraft fee under these circumstances,
however, if it provides notice to the customer, in the notice of exception
required by paragraph (g) of this section, that the fee may be subject
to refund, and refunds the charges upon the request of the customer.
The notice must state that the customer may be entitled to a refund
of any overdraft fees that are assessed if the check being held is
paid, and indicate where such requests for a refund of overdraft fees
should be directed.
9-168
1. Certain emergency conditions
may arise that delay the collection or return of checks, or delay
the processing and updating of customer accounts. In the circumstances
specified in this paragraph, the depositary bank may extend the holds
that are placed on deposits of checks that are affected by such delays,
if the bank exercises such diligence as the circumstances require.
For example, if a bank learns that a check has been delayed in the
process of collection due to severe weather conditions or other causes
beyond its control, an emergency condition covered by this section
may exist and the bank may place a hold on the check to reflect the
delay. This exception applies to local and nonlocal checks, as well
as checks that would otherwise be made available on the next (or second)
business day after the day of deposit under section 229.10(c). When
a bank places or extends a hold under this exception, it need not
make the first $100 of a deposit available for withdrawal on the next
business day, as otherwise would be required by section 229.10(c)(1)(vii).
In cases where the emergency-conditions exception does not apply,
as in the case of deposits of cash or electronic payments under section
229.10(a) and (b), the depositary bank may not be liable for a delay
in making funds available for withdrawal if the delay is due to a bona fide error such as an unavoidable computer malfunction.
9-169
a. If a depositary bank invokes any of the safeguard
exceptions to the schedules listed above, other than the new-account
or emergency-conditions exception, and extends the hold on a deposit
beyond the time periods permitted in sections 229.10(c) and 229.12,
it must provide a notice to its customer. Except in the cases described
in paragraphs (g)(2) and (g)(3) of this section, notices must be given
each time an exception hold is invoked and must state the customer’s
account number, the date of deposit, the reason the exception was
invoked, and the time period within which funds will be available
for withdrawal. For a customer that is not a consumer, a depositary
bank satisfies the written-notice requirement by sending an electronic
notice that displays the text and is in a form that the customer may
keep, if the customer agrees to such means of notice. Information
is in a form that the customer may keep if, for example, it can be
downloaded or printed. For a customer who is a consumer, a depositary
bank satisfies the written-notice requirement by sending an electronic
notice in compliance with the requirements of the Electronic Signatures
in Global and National Commerce Act (12 U.S.C. 7001 et seq.), which include obtaining the consumer’s affirmative consent
to such means of notice.
b. With respect to paragraph (g)(1), the requirement
that the notice state the time period within which the funds shall
be made available may be satisfied if the notice identifies the date
the deposit is received and information sufficient to indicate when
funds will be available and the amounts that will be available at
those times. For example, for a deposit involving more than one check,
the bank need not provide a notice that discloses when funds from
each individual check in the deposit will be available for withdrawal;
instead, the bank may provide a total dollar amount for each of the
time periods when funds will be available, or provide the customer
with an explanation of how to determine the amount of the deposit
that will be held and when the funds will be available for deposit.
Appendix C (C[dash ]12) contains a model form of this exception notice.
c. For deposits made in person to an employee of
the depositary bank, the notice generally must be given to the person
making the deposit, i.e., the “depositor,” at the time
of deposit. The depositor need not be the customer holding the account.
For other deposits, such as deposits received at an ATM, lobby deposit
box, night depository, or through the mail, notice must be mailed
to the customer not later than the close of the business day following
the banking day on which the deposit was made.
d. Notice to the customer also may be
provided at a later time, if the facts upon which the determination
to invoke the exception do not become known to the depositary bank
until after notice would otherwise have to be given. In these cases,
the bank must mail the notice to the customer as soon as practicable,
but not later than the business day following the day the facts become
known. The Board has clarified in the regulation when a depositary
bank is deemed to have knowledge of the facts upon which the determination
is made. A bank is deemed to have knowledge when the facts are brought
to the attention of the person or persons in the bank responsible
for making the determination, or when the facts would have been brought
to their attention if the bank had exercised due diligence.
e. In those cases described
in paragraphs (g)(2) and (g)(3), the depositary bank need not provide
a notice every time an exception hold is applied to a deposit. When
paragraph (g)(2) or (g)(3) requires disclosure of the time period
within which deposits subject to the exception will be available for
withdrawal, the requirement may be satisfied if the one-time notice
states when on-us, local, and nonlocal checks will be available for
withdrawal if an exception is invoked.
9-169.1
2. One-Time Exception Notice a. Under paragraph (g)(2), if a nonconsumer account (see commentary to section 229.2(n)) is subject to the large-deposit or redeposited-check
exception, the depositary bank may give its customer a single notice
at or prior to the time notice must be provided under paragraph (g)(1).
Notices provided under paragraph (g)(2) must contain the reason the
exception may be invoked and the time period within which deposits
subject to the exception will be available for withdrawal (see model notice C-14). A depositary bank may provide a one-time notice
to a nonconsumer customer under paragraph (g)(2) only if each exception
cited in the notice (the large-deposit and/or the redeposited-check
exception) will be invoked for most check deposits to the customer’s
account to which the exception could apply. A one-time notice may
state that the depositary bank will apply exception holds to certain
subsets of deposits to which the large-deposit or redeposited-check
exception may apply, and the notice should identify such subsets.
For example, the depositary bank may apply the redeposited-check exception
only to checks that were redeposited automatically by the depositary
bank in accordance with an agreement with the customer, rather than
to all redeposited checks. In lieu of sending the one-time notice,
a depositary bank may send individual hold notices for each deposit
subject to the large-deposit or redeposited-check exception in accordance
with section 229.13(g)(1) (see model notice C[dash ]13). A
depositary bank may continue to send hold notices for each deposit
subject to the large-deposit or redeposited-check exception in accordance
with section 229.13(g)(1) (see model notice C-12).
b. In the case of a deposit
of multiple checks, the depositary bank has the discretion to place
an exception hold on any combination of checks in excess of $5,525.
The notice should enable a customer to determine the availability
of the deposit in the case of a deposit of multiple checks. For example,
if a customer deposits a $5,525 local check and a $5,525 nonlocal
check, under the large-deposit exception, the depositary bank may
make funds available in the amount of (1) $225 on the first business
day after deposit, $5,300 on the second business day after deposit
(local check), and $5,525 on the eleventh business day after deposit
(nonlocal check with six-day exception hold), or (2) $225 on the first
business day after deposit, $5,300 on the fifth business day after
deposit (nonlocal check), and $5,525 on the seventh business day after
deposit (local check with five-day exception hold). The notice should
reflect the bank’s priorities in placing exception holds on
next-day (or second-day), local, and nonlocal checks.
9-169.2
3. Notice of Repeated-Overdraft Exception Under paragraph (g)(3), if an account
is subject to the repeated-overdraft exception, the depositary bank
may provide one notice to its customer for each time period during
which the exception will apply. Notices sent pursuant to paragraph
(g)(3) must state the customer’s account number, the fact the
exception was invoked under the repeated-overdraft exception, the
time period within which deposits subject to the exception will be
made available for withdrawal, and the time period during which the
exception will apply (see model notice C-15). A depositary
bank may provide a one-time notice to a customer under paragraph (g)(3)
only if the repeated-overdraft exception will be invoked for most
check deposits to the customer’s account.
4. Emergency-Conditions Exception
Notice a. If an account is subject
to the emergency-conditions exception under section 229.13(f), the
depositary bank must provide notice in a reasonable form within a
reasonable time, depending on the circumstances. For example, a depositary
bank may learn of a weather emergency or a power outage that affects
the paying bank’s operations. Under these circumstances, it
likely would be reasonable for the depositary bank to provide an emergency-conditions
exception notice in the same manner and within the same time as required
for other exception notices. On the other hand, if a depositary bank
experiences a weather or power-outage emergency that affects its own
operations, it may be reasonable for the depositary bank to provide
a general notice to all depositors via postings at branches and ATMs, or through
newspaper, television, or radio notices.
b. If the depositary bank extends the hold placed
on a deposit due to an emergency condition, the bank need not provide
a notice if the funds would be available for withdrawal before the
notice must be sent. For example, if on the last day of a hold period
the depositary bank experiences a computer failure and customer accounts
cannot be updated in a timely fashion to reflect the funds as available
balances, notices are not required if the funds are made available
before the notices must be sent.
5. Record Retention A depositary
bank must retain a record of each notice of a reasonable-cause exception
for a period of two years, or such longer time as provided in the
record-retention requirements of section 229.21. This record must
contain a brief description of the facts on which the depositary bank
based its judgment that there was reasonable cause to doubt the collectibility
of a check. In many cases, such as where the exception was invoked
on the basis of a notice of nonpayment received, the record requirement
may be met by retaining a copy of the notice sent to the customer.
In other cases, such as where the exception was invoked on the basis
of confidential information, a further description to the facts, such
as insolvency of drawer, should be included in the record.
9-170
1. If a depositary bank invokes
any exception other than the new-account exception, the bank may extend
the time within which funds must be made available under the schedule
by a reasonable period of time. This provision establishes that an
extension of up to one business day for on-us checks, five business
days for local checks, and six business days for nonlocal checks and
checks deposited in a nonproprietary ATM is reasonable. Under certain
circumstances, however, a longer extension of the schedules may be
reasonable. In these cases, the burden is placed on the depositary
bank to establish that a longer period is reasonable.
2. For example, assume a bank
extended the hold on a local check deposit by five business days based
on its reasonable cause to believe that the check is uncollectible.
If, on the day before the extended hold is scheduled to expire, the
bank receives a notification from the paying bank that the check is
being returned unpaid, the bank may determine that a longer hold is
warranted, if it decides not to charge back the customer’s account
based on the notification. If the bank decides to extend the hold,
the bank must send a second notice, in accordance with paragraph (g)
of this section, indicating the new date that the funds will be available
for withdrawal.
3. With respect to Treasury checks, U.S. Postal Service
money orders, checks drawn on Federal Reserve Banks or Federal Home
Loan Banks, state and local government checks, cashier’s checks,
certified checks, and teller’s checks subject to the next-day
or (second-day) availability requirement, the depositary bank may
extend the time funds must be made available for withdrawal under
the large-deposit, redeposited-check, repeated-overdraft, or reasonable-cause
exception by a reasonable period beyond the delay that would have
been permitted under the regulation had the checks not been subject
to the next-day (or second-day) availability requirement. The additional
hold is added to the local or nonlocal schedule that would apply based
on the location of the paying bank.
4. One business day for on-us checks, five business
days for local checks, and six business days for nonlocal checks or
checks deposited in a nonproprietary ATM, in addition to the time
period provided in the schedule, should provide adequate time for
the depositary bank to learn of the nonpayment of virtually all checks
that are returned. For example, if a customer deposits a $7,000 cashier’s
check drawn on a nonlocal bank, and the depositary bank applies the
large-deposit exception to that check, $5,000 must be available for
withdrawal on the first business day after the day of deposit and the remaining
$2,000 must be available for withdrawal on the eleventh business day
following the day of deposit (six business days added to the five-day
schedule for nonlocal checks), unless the depositary bank establishes
that a longer hold is reasonable.
5. In the case of the application of the emergency-conditions
exception, the depositary bank may extend the hold placed on a check
by not more than a reasonable period following the end of the emergency
or the time funds must be available for withdrawal under sections
229.10(c) or 229.12, whichever is later.
6. This provision does not apply to holds imposed
under the new-account exception. Under that exception, the maximum
time period within which funds must be made available for withdrawal
is specified for deposits that generally must be accorded next-day
availability under section 229.10. This subpart does not specify the
maximum time period within which the proceeds of local and nonlocal
checks must be made available for withdrawal during the new-account
period.
