Tuesday, August 11, 2009

Chase-ing Our Money

Yesterday at work we received a notice from Chase that they had placed a hold on a pair of checks we had deposited. Under "Hold Reason" it states "the deposited checks are not consistent with the account's normal deposit activity." The hold period is 9 -- count 'em, 9 -- days! Further, it states that "If the checks you deposited are paid, we will be happy to refund any Chase overdraft or Chase returned check fees directly caused by this deposit hold."

Okay, so let's take this a bit at a time.
First of all, the deposit is no different than many of the deposits we have been making for years. They are checks from our largest customer, one of the biggest construction firms in the world. It is not unusual at all for us to receive a check of six figures from them.
Second, nine days?! Who are they kidding? Do they expect us to believe they are waiting for an armored truck to arrive at the branch with a pile of cash?
Finally, they "will be happy to refund any Chase overdraft or Chase returned check fees caused by this deposit hold." What about fees charged by one of our vendors if Chase bounces a check we've written, expecting this money to be available? I guess they don't think they are responsible if we were foolish enough to try to spend the money in fewer than nine days.

Banks have always played games with the "float," that period between the time you deposit a check and the time they credit it to your account. It's no longer the property of whoever wrote the check but it isn't yours yet either. For whatever that limbo period is, it belongs to the banks (and, obviously, they decide how long the period is).

In the pre-computer days, it would take longer for an out-of-state check to clear than a local one. Not so any more. Millions of dollars are transferred all over the world with a couple of keystrokes every minute of every day, but the banks still insist that it takes days to collect the money. And, as a result, every time we deposit a check, we are making an interest-free loan to the banks.

So, if this is one of the games the banks play and it's right under our noses, one can only imagine what else they are doing where we can't see them.


  1. Congress passed legislation back in the 90's to limit bank's abilities to do this sort of thing. I haven't worked in banking since 1996, so my memory of this stuff is fuzzy. I can't really say for sure if they're breaking the law, but they're certainly breaking the intent of it. But big corporations make their living exploiting loopholes, so no surprise there. At the bank where I worked, when the float changes went into effect, we were instructed to hold special brain-storming sessions to come up with new fees to charge our customers to make up for the lost float income. I was appalled, but participated, as I had no choice.

    Sorry you're going through this. Glad I found your blog recently. I hadn't heard from you since my National Pastime days.

  2. With great sorrow and regret, I welcome you to the 21st century. These are the same banks who were foundering, about to go belly up, and suffered a major crisis of confidence with users just a few months ago. Isn't it nice how they've created an atmosphere of friendlieness, efficiency, and convenience for customers to reassure them of the banking business?

    Myself, I recommend a good mattress hidden somewhere any more. It seems the banks are trying to play on the government's sympathy for more bail out money, so that we can continue to enjoy the "services" they provide to us.

    I remain,
    Eric L. Sofer
    The Silver Age Fogey

  3. Ah, yet another reminder of why I use a credit union, and why I'm so wary that they're acting more and more like a bank.

  4. You're sounding like a Democrat, and I know you're the last holdout of the Bull Moose Party.