Credit Union Law...
May 25, 2012 11:22 PM   Subscribe

[US banking law filter] So my credit union 'forces' me to deposit checks, payable to me, into a savings deposit account (share deposit account), rather than my checking account. I'm not sure they should be doing this. Lots of gory details inside....

The tellers just state this as a matter of policy when I try to deposit a check into checking instead. The mandatory or 'forced' deposit to savings stipulation (and i think this is important) isn't mentioned in any of the credit union disclosure documents.

The credit union has slapped a '15 day hold' (wtf?) on the fund instrument I just deposited -- a high quality check, issued payable through the Bank of New York (a Federal Reserve Bank.) I maintain the funds should have been available 'next business day' because of the Federal Reserve Bank 'exception' as afforded by Regulation CC of the expedited Funds Availability Act.

Credit union is claiming exemption under Regulation D (based on stipulation 'savings deposit account' doesn't pass test as a 'transactional account') -- as a result they claim, Reg CC statutes don't apply to savings deposit accounts. So isn't that neat as a button?

This neatly circumvents all rights afforded by Regulation CC of the Expedited Funds Availability Act.

I've familiarized myself with Regulation CC (and Reg D.)

Can they force me to deposit into one account rather than another without mentioning it in a disclosure and, if not -- is that sufficient grounds for complaint to the appropriate regulatory bodies? (I have the 'appropriate' list.)

Do I have grounds for a complaint to the appropriate regulatory bodies for some regulatory violation?

Do I really have no protection as would normally be afforded by Regulation CC in this outline? --

Their Funds Availability Policy Disclosure document (a hand typed one-sheet dated -- 1993 -- that I had to request four times), mentions the Federal Reserve Bank exemption but makes no mention of it applying only to checking accounts.

I have tried to negotiate a release of the hold with no success. No reason given. (Yes, I know -- that's a violation of regulations, too.)

It's a rather provincial group I'm dealing with. Lastly my attitude has been unimpeachable in my dealings over this issue. I cannot say the same for the bank representatives. Qualified input appreciated.
posted by Muirwylde to Law & Government (10 answers total) 3 users marked this as a favorite
At first blush, you may want to seek out the NCUA (to which the Hawaii DFI refers me).
* When to file a complaint (I gather this goes to the NCUA Ombudsman, ultimately)

There's also the Consumer Financial Protection Bureau, but it doesn't appear to be up to speed quite yet.
posted by dhartung at 1:09 AM on May 26, 2012 [1 favorite]

I see no restrictions in Reg CC that refer to the type of account the instrument is being deposited into. The first $5000 of that check is as good as cash. Moreover, Reg D has nothing to do with funds availability from deposited checks.

This sounds like a tiny credit union. Do you think you could talk to someone higher up in the organization to let them know this is going on?
posted by one more dead town's last parade at 3:25 AM on May 26, 2012

As much as people here love credit unions, these stories are the sorts of things I consistently hear about credit unions in real life.

You can make complaints, but I think you are stuck as far as getting your money before the 15 day window. I doubt you are going to get a response from the regulators before that time.

Nonetheless, you should make the complaints. That sounds like some shady dealings, and they need to be stopped.
posted by gjc at 4:25 AM on May 26, 2012

Sounds like a technique for generating float. Doubt there's ill-intentions behind it, rather they may have liquidity problems. You may want to ring up the manager and have a chat about it. If they are having trouble with cash, you may want to make other arrangements.
posted by nickrussell at 4:29 AM on May 26, 2012 [4 favorites]

Have you tried contacting the board of directors? They should know that their organization is doing some questionable things with the members' money.
posted by TedW at 4:49 AM on May 26, 2012 [1 favorite]

You are a member not a customer, remember that in your dealings with them and ask to speak to people higher up the chain. Keep getting bumped up until you get an answer or at least inform someone that can change things that something dodgy is going on.
posted by wwax at 6:22 AM on May 26, 2012 [1 favorite]

I've been a member of a credit union for 20+ years and have always deposited my checks into my checking account. Whether it's been via mail deposit, ATM, direct deposit, or walking into a branch, this has never been a problem.
posted by BlahLaLa at 7:05 AM on May 26, 2012

I am so confused because personally I got slapped with a few warnings from multiple banks for using my Savings account too often - your checking account should be showing multiple deposits/withdrawals (more than 3 each a month), they said, not a Savings account. All the notices I received mentioned a government rule saying if this was exceeded they could fine me or close my account (they never did, I just always got warnings).

Anyway, it almost seems like your CU is setting you up for this, which doesn't seem very honest.
posted by Lt. Bunny Wigglesworth at 2:16 PM on May 26, 2012

Reg D has to do only with savings accounts and how many transactions you can make from it (the logic being you shouldn't be doing lots of transactions from something that's supposed to be a savings vehicle). From my experience at working at a bank, Reg CC applies to all accounts (IANAL, TINLA, etc etc). Theoretically they could place ridiculously long holds if you had a new account and/or the bank was unfamiliar/hinky, but this does not sound like the case. I would call shenanigans and talk to a higher source of authority in the credit union, because this sounds absolutely wrong.
posted by calistasm at 6:10 PM on May 26, 2012

We probably make 20 deposits to our CU checking account for every savings account deposit we make. Whatever's going on, it's not a uniform credit union requirement or regulation.
posted by Lexica at 9:52 PM on May 26, 2012

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