To have a check returned or bounce after it has been deposited into an account can happen and is not entirely uncommon.  Just because a bank accepts a deposit and makes the funds from that deposit available to the account holder, this does not mean that the check will clear or will not bounce at a later date.

Funds availability for deposits is established by the bank where the account is held and by the regulations established by the Federal Reserve.  The Federal Reserve sets the maximum amount of time a bank may hold depositors funds, the individual bank may set availability policies that are more lenient but not more restrictive than those established by the Fed.

Federal regulations that set the time on check holds and funds availably do not prevent banks from recovering funds related to checks or electronic deposits that are returned unpaid, even when the bank has already given the consumer use of the deposited funds.

The hold time for checks and other deposits are designed to help protect the bank and the bank customer from fraudulent payments, payments drawn on accounts with insufficient funds, or payments from accounts that have been closed.  In general, the hold times on a deposit is established to ensure the checks and other deposits made have sufficient funds available to clear the payer’s bank account.

Every bank must provide its customers with a copy of their Funds Availability Policy.  Regulation CC requires that financial institutions provide customers who have a transaction account with disclosures stating when their funds will be available for withdrawal that describes its practices for making funds available for withdrawal after deposit.  However, the funds that are made available for withdrawal by the bank is not an assurance that those deposits are good and that any checks that are deposited will not bounce after the funds have been made available.

While many consumers may believe it is the bank’s responsibility to clear the funds and make sure the check or checks deposited are good, the account holder is responsible for any funds they withdraw against the checks deposited regardless of whether the funds were made available by the bank.

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