The account was opened 20 days ago with an average balance of $5,000. The customer keeps an average balance of $2,300.00 and it’s too late to call 1st State Bank in Chicago to verify that this is a valid Cashier’s Check. You call on the check for $950 and are told there are insufficient funds in the account to pay the check. The average balance in the account is $8,000 New Accounts have a slightly different Hold Schedule – be aware of the limitations on Cashier’s Checks, Treasury Checks, Postal Money Orders, State/Local Government checks, Federal Reserve and Federal Home Loan Bank checks, and Travelers Checks.In the last month, the account has been overdrawn 10 times.Īverage balance in the account has been $6,500.00 This account has been a chronic overdraft. You call on the $2,450 check and are told there are not enough funds to pay the check. The account maintains an average balance of $9,500. This account has been handled in a satisfactory manner. How would you treat a hold on this deposit? There has been very recent NSF activity, but not enough to warrant an Exception Hold due to NSF activity. This account has shown a wide range of balances. If so, how would you treat a hold on this deposit? Would the risk assessment of this deposit be different than above? Same transaction as above EXCEPT, this account has been open for 3 weeks. Would you place a hold on any of these checks? The average balance in the account is $50,000. Complete the hold information on the photocopy of the Hold Notice.Make copies of a Hold Notice to use for practice.This set should represent what the branch staff, as a whole, decided the best course of action should be and should also represent the most accurate completion of the Hold Notice itself. Finally, when this exercise has been completed, send one set of hold notices back to the Compliance Department for review.If done individually, then it would be helpful to go over the individual results with a group. You can do this exercise as a group or individually.Look at all of the exceptions including New Accounts, Large Deposit, Reasonable Cause to Doubt Collectability, and Repeated Overdrafts. Some situations will require you to look at the hold schedule to make sure you don’t place a hold for too long.Some situations call for a judgement of if a hold should be placed, and if a hold should be placed on one or more checks in the deposit.So the risk management assessment that must be done is to balance the total protection of the Bank with the need to preserve customer goodwill and facilitating the opportunity to grow a profitable relationship. The other risk is losing a good customer if a hold is placed when the situation doesn’t really warrant a hold. One risk is that the item will not be paid, and the bank may face a loss. Every time the bank accepts a deposit, it is accepting a risk. Regulation CC is a risk management tool.Of course, holds can always be placed for a shorter period of time. This means that holds cannot be placed for a longer period of time than allowed by the Regulation. Any holds placed must be done within compliance of Regulation CC.This exercise is designed to stimulate thought on different aspects of placing holds. She also holds an AAP and NCP accreditation.The following pages contain some sample transactions to practice placing holds under Reg CC. Prior to joining WesPay, Angie spent seven years at various regional payments associations and was responsible for managing education and consulting services to financial services.Īngie spent over thirteen years at the Federal Reserve Bank, where she was responsible for processing handling of checks, returns and adjustment.Angie currently serves on the ECCHO Editorial Board for the NCPC Program. She consults to financial institutions in the areas of payments regulations and process improvement. She brings thirty years of payments experience to WesPay Advisors and has worked for leading payments organizations, including Federal Reserve Bank, Viewpointe, and MACHA – The Mid-Atlantic Payments Association. Angie Smith currently serves as the Senior Vice President of Professional Development Events at WesPay, where she is responsible for member programs supporting the AAP and NCP accreditations.Īngie is a recognized industry expert in both paper and electronic payments regulation.
0 Comments
Leave a Reply. |