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Credit Union Restricted Account Access So Withdrawal is not Possible

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My relative who is 64 years old got two cashier's checks deposited directly in her account on Feb. 24 2017 total amount of 20k. Today it is March 13 2017 which is 3rd week and credit union has restricted account access so funds and were not available for withdrawal. When asked this CU said we need to verify/validate the check deposited because they think it is a scam or bogus check and we want to protect or our member. But they could not specify when funds would be available. 

Is this common to hold the funds for such long time? when we check at ATM it shows funds fully available but when try to withdraw it says not possible. 

She gave me power of attorney because she is kinda sick so when I talked with CU about this on phone.....that girl said well you might be a part of scam....

Are their any rules to protect consumers against such practice? what is allowed time limit for bank/credit union to hold funds like this?

if there are any rules or law please refer me to such in state of WA

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Just guessing but what probably happened is something like this:

 

Someone contacted your relative and proposed that he or she would send your relative cashier's checks for $20,000 for deposit in your relative's account.  In return, your relative would transfer funds to a third party by wire transfer, Western Union, gift card (Target is popular), or paypal.  Your relative deposited the "cashier's checks" and transferred the funds.  Now the credit union has discovered the "cashier's checks" are forgeries.  If that is what happened your relative is the victim of a fairly popular scam and has been swindled out of whatever he or she transferred to the third party.  There is no $20,000 in the account.

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9 hours ago, curiousvi said:

My relative who is 64 years old got two cashier's checks deposited directly in her account on Feb. 24 2017 total amount of 20k.

 

Depositing a cashier's check and receiving a direct deposit are two very different things.  Which was it?  Did the $$ come from a U.S. based bank or other financial institution?

 

 

Is this common to hold the funds for such long time?

 

I'm sure it's quite common if the bank or credit union suspects "a scam or bogus check."

 

 

9 hours ago, curiousvi said:

She gave me power of attorney because she is kinda sick so when I talked with CU about this on phone.....that girl said well you might be a part of scam.

 

Have you gone to the credit union in person with the original POA to show and a copy for the CU's records?  If not, then I'm surprised the folks there are willing to discuss this with you at all.

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https://www.thebalance.com/funds-availability-315448

Holding Times

Federal regulations limit how banks can set up their funds availability policies. Banks are allowed to be less strict if they want – they can make funds available immediately, and they often do so – but they cannot hold funds forever.

If there is a hold on your deposit, the bank should provide you with the release date on a receipt. In some cases, they add a hold later (and mail you a notice), so it’s a good idea to check your account before spending if you’re running low on funds.

Next business day: most banks say that they “generally” make funds available on the business day after you make a deposit, but there are exceptions. Cash deposits made to a bank employee must be made available within one business day (and those deposits are often available immediately). Certain types of checks must also be available in one business day:

  • Official bank checks like cashier’s checks
  • Checks issued by the U.S. Treasury (such as your tax refund or Social Security)
  • Checks for $200 or less
  • Checks drawn on the same bank that you’re depositing to
  • USPS money orders

If the total amount of deposits by check in one day is more than $5,000, or if a check is endorsed by anybody other than the payee to whom it was issued, banks can add a hold.

Electronic deposits like wire transfers and direct deposit are also generally available within one day.

Business days include weekdays that are not holidays.

Longer Hold Times

The Expedited Funds Availability Act (Regulation CC), which sets rules on how quickly banks need to release your funds, allows longer hold times under certain circumstances. These are often called exceptions.

When an exception applies, the bank may hold funds for a “reasonable” amount of time. That time is not specifically defined, but 5 business days or so is about as long as you should have to wait.

More than $5,000: if you deposit more than $5,000 in checks – even official checks or government checks – the bank must make the first $5,000 available within one business day, but a hold can be placed on the remaining amount.

Redeposited checks: if a check is redeposited (because it bounced when it was first deposited), the bank can add a longer hold. You should also be concerned about those checks.

Repeatedly overdrawn account: overdrawing your account (or spending more money than you have available in the account) doesn’t just cause hefty bank fees – it can also lead to holds on your deposits, which makes it even more likely that you’ll go into the negative.

Reasonable doubt: if the bank suspects that the check will not be honored, they can add extra hold time. Common reasons include postdated checks and checks that are more than 60 days old.

New accounts: brand new accounts are especially risky for banks. If your account is less than 30 days old, expect to have checks held for up to nine days. However, electronic payments and official checks should have at least partial next-day availability.

Note that these regulations also apply to federally insured credit unions.

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If they give you the money, will you be in a position to pay it back right away if the check turns out to be fraudulent? You realize they are doing this not only for their protection, but for hers as well. If they haven't been able to verify the check after 3 weeks, it is undoubtedly fraudulent. BTW, why is this posted under the automobile accident section?

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2 hours ago, curiousvi said:

Even the longer hold time (exception) should not be more than 7 business days as I read about expedited fund availability act.

 

Please answer the questions I asked:  "Depositing a cashier's check and receiving a direct deposit are two very different things.  Which was it?  Did the $$ come from a U.S. based bank or other financial institution?"  "Have you gone to the credit union in person with the original POA to show and a copy for the CU's records?"

 

 

2 hours ago, doucar said:

BTW, why is this posted under the automobile accident section?

 

Good question.

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automobile section...my mistake....

It was deposited as cashier's check using shared branching between credit unions.

 

Finally I got a call today that they verified and it was not verified until today because they did not even try ...they were just sitting on it 

 

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