Hold Notice for New Accounts

In this Compliance Clip (video), Adam talks about the hold notice rules for New Accounts. Specifically, Adam answers the question as to whether a hold notice is required when using a new account hold under Regulation CC.

For those interested in a comprehensive teller training program on holds and funds availability, be sure to check out our Reg CC Training for Tellers (found here) as our program covers everything tellers need to know about holds as of the rule changes on July 1, 2020.

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Video Transcript

The following is a transcript of this video.

This Compliance Clip is going to talk about the hold notice for new accounts. Specifically, the question we received recently was, “Do we have to provide a hold notice at the time of deposit for new accounts?”

A new account is when you have a new transaction relationship to the organization where it's an absolute new transaction relationship. So the question is, do we have to provide a hold notice when we place a hold on a new account, because it is a new account. The answer, of course, to this is found in Regulation CC, it's found in part 229.13(g), which is the section that talks about special exception holds. And, of course, the new account special exception holds found in 229.13(a). S

If we look to what the commentary says, it explains that if it a depository bank invokes any of the safeguard exceptions to the schedules listed above, other than the new account or emergency condition exception, and extends the hold on a deposit beyond the time periods permitted in Regulation CC, then it must provide a notice to its customers. The key here is other than the new account or an emergency condition exception. The way that 229.13(g) says this is it basically says if a hold is placed based on 229.13(b) through (f), and, again, the new accounts special exception hold is 229.13(a), so that is excluded from the hold notice requirements for special exception. So, no, you do not need to give a hold notice for a new account special exception hold. However many financial institutions do as a courtesy to the customer so that they know what's going on and it helps them to understand just a little bit more the rules that you have in your organization.

That's all I have today for you in this Compliance Clip.