Complaint Review: Bank of America - Downey-Norwalk California

On October 5, 2019, I went into my local branch with a check over $5,000 payable to me from a well-known, well-established bank. I specifically asked about funds availability as my husband and I have a hard October 15 deadline to make a payment. I would have taken that check anywhere else if I had been told about a NINE day hold on ALL funds. The bank associate made a phone call and said the funds would be released the next business day, which was interpreted as Tuesday (October 8).

On that day, the processing payment has turned into hold with ZERO availability until October 17, 2019.

This hold does not follow Regulation CC:

“If the total check deposits into one account on the same business day is over $5000, then $200 must available on the first business day, $600 on the second, $4800 on the 3rd, and the remainder must be available on the 7th business day.”

Regulation CC stipulates four types of holds that a bank may place on a check deposit at its discretion. And yes we understand that each has its own qualifications and it is legal for the bank to place any type where the requirements are met. It is my belief that Bank of America has arbitrarily instructed a type of hold placed that holds the most funds the longest that can be applied legally. Furthermore, I believe in doing, the bank is way outside the scope of this funds availability law and to date has not provided a legitimate reason for holding on to ALL of our check.

• There is only one check processing region for the entire United States. Therefore, all checks are now local.
• BOA associates will tell me the holds are placed "for security reasons" and "federal law requires (Reg CC) all banks to have holds: but again no specifics are given.
• I believe this "deposit hold" is a shell for floating our money by using it investing in short term investments.

My husband and I have spoken to several associates on the phone to escalate properly. I finally spoke with marketing manager Dean A.  It was such a bad experience that I it threatens this multi year relationship. Mr. A. acknowledged that he was using a loophole in Regulation CC based on speculative, rather that actual information, that the check I endorsed would not be paid. He also was just as confusing as the other associates who read the same script without any accountability or problem-solving authority.

The issuing bank had this to say:

"We do not place a hold. Your bank would have placed an hold on the funds. This is usually done for various reasons. 

You should contact your financial institution as to the reason or reasons they placed an hold on the funds."

We are owed an explanation of why we cannot have any access to our funds, not what could happen under endless scenarios:

None of the so-called NSF exceptions apply, neither for the amounts or the length of time.

The depository bank has NO reason to doubt the check is good. (The paying bank already indicated the check funds were cleared.

The check was not postdated or stale dated and was NOT previously returned.

The manager (Mr. A) who refused to release the funds said: "We're saying we are potentially worried so we are going to review it for you No one in Bank of America is going to know the reason it's based on regulatory cc: we have to put it not in one component but under an umbrella. That means any of them are going to fit under one umbrella."

Large banks are using power and bureaucracy to violate consumer protections and hold account holder deposits hostage. Many of these banks have already been caught stealing from customers by assessed extended overdrawn balance charges that violate the National Bank Act’s usury limit. Now we have a growing new assault: the absolute, multi-day deposit hold on consumer check deposits.

Hiding behind imagined conspiracies and fraud, my own bank has delayed a legitimate lump sum payment check. For a bank that processes the accounts of millionaires, it seems egregious that a major retirement fund would be flagged for fraud.

I have banked here off and on since 1996. My husband has banked here since 2001. We cannot believe we are being treated this way. We need those funds to pay taxes and other bills and now the interest is piling up, and we were persuaded to open an account with a 10,000 minimum and now we have going to have penalties from that! The right thing to do would be to release our money at least under the rubric of Regulation CC.