European Stars And Stripes (Newspaper) - January 24, 1986, Darmstadt, Hesse                                10 the stars and stripes Friday january 24, 19b6 Bank replies to More questions about holds.,.,_,., Nitim. Cradle time researching tie subject although now of the following tins Ever happened to me. 1 Tell compelled la write. A while Oro you published an american express spokesperson s response to a Reader s question about Lite Bank s no Lucy of placing holds on checks. Your Reader was upset because Thil bunk Hud placed u hold an a cashier s Check. Briefly american i a press explained is Hod policy a common banking practice whereby Banks do Nai allow inc customer no Cess to their funds until he Cheeks have cleared. The hold policy varies from a Flat to Bank. Some Banks place holds on checks Over a Obriain and Una nationally holds Range from ihrec1015 Days. Some Banki place holds on checks drawn on out of Szalc Banks. The american express spokesperson quoted terms of the Dod contract regard ing holds. The Sixto Potson Ihen went on to say that bad checks increase the Cost of the contract Wilh Doo and Ihus increase the Canto the a Moriea n la Snayer. In essence the american express spokesperson was saying the Bank places holds on checks to prevent tosses which Are in turn passed on to the taxpayer. If that s the Case we Vegol a bad con tract bad Cheeks arc morally unacceptable but not bad business for Banks. Consider the following 1. According to consumer re porn s40 billion in checks Are written each year. Only 1 percent Bounce. I the to Raff loss la All Banks from bad checks is Only s2,-Ioo. 3 Banks can and to ii surr against bad checks. So where is this big Fisk to Banks Why do they hoj checks 1 bad checks Are very big bus Incis for Banks like american express. Let s Sny a Hank places a five Day hold on a. Check or. For that int scr a 10-Day held. If that Check clean in less Lime than the Bank holds us the Bank has Access to inc con Sumer s Money without paying thai con Sumer a cent . Thus if your Check clears in three Days and the Bank placed a five Day hold on it one of the menu Niue holds by the Way ii in med our Money without paying you any inc rail. This is called n float in banking circles. Banks have Over the years required hot  new equipment be installed to male Check Clear faster. American express could argue that we Are overseas and checks Lake longer in Clear bul this letter is a commentary on banking practices in general. We Haw had computers for years and checks could Clear in a Day if Banks wanted them to. Banks make millions on bad checks. The scary Par is the consumer often does nol know that a hold is being placed on the Check and thus writes checks on funds he does t have although he right fully thinks he does. Congress has legislation pending that will hopefully outlaw this consumer rip off. According to lha chairman of the House Bank ing finance and Urban affairs committee rep. Fern anti St Germain , White the depository institutions hold he Deposit  the customer writes checks Many of which Are marked insufficient funds and gets socked with a sip Sis. S20 fee. Al the while the financial institution refuses to Post the Deposit which is often hundreds of dollars in excess of inc insufficient funds Ilams. The institution has use of the float a profitable item and at the same time collects a Little extra in the form of Ciu Rcd Check fees from the customer. In Short it s m All win solution for the institutions u sure loser i r the customer. Lust Spring. New Vork or Lelm i to Al Veen old end i would like Den Palm. I Lerski Fanung to music. Gun Zany and pen pal . R Ali " old e a Rte Lorap Onildo 3d Allent or Plait Pic pc Irv name an Unur pen put Mil. I am Fari old and to inter filed in Scotina rat dip mag ctr philippine i would i Jeff in a Felt Tram by Tivit lha world. I Amii pm old ind a Catholic. My hobble include w4lcmn9 to new Reading and Veine. Jul Lela eidolon a Verne 5rr#eigdhulnflan, Neermol Oriental Phillip Lei s2s i would like to Carre Uono with other bom . I a 3s year aka. My Hub brei Are biking. A nine Cookle and Wal in t a  Lavonue co rare  Negrot Oriental Phllip plot ails i am 19 Veen old and i would like pen pall.  Ara but lev Dancona Reading and writing. I or Enlal t would vie Oen East irom an aver the world. I am21 ver old. R Veniey read no  and Lakona Cara of . Delve Alv Vaj m. Parsi  Negr Orien Lai Phill Poiner 4515 i am a v4r Oie anti would it t pen Pali like Lacook Mercedes r. Selvailra23s-j known a a Tiv a ave Dan cat 9u1 flip plan. Would like pen hit for .1 other count run. I in 36vean old. I Eno Swimm 3. Aim tour nil Dova the Wiirre Dum Aguele Civ. Pm spinet Tsai crack Lynw  Lite Subj re of Check holds we enjoy i cirs such m yours and thank you for a i to wine viol in  Faith Nith the exp caution 1ia the Check will be honoured. As stated in your idler , Banks have More imn dial a Ceca to the Feder Al Reserve Bank Check Clearine houses than the Community Hank does. Therefore it can he expected that is Check will take longer to Clear from Europe considering 1hl, our lie Day hold policy is reasonable find below the National it crag. However we would Livo to add that although dishonoured Check May constitute less than 1 percent or All banking transactions nationwide this still rep resents a substantial Cost of doing Busi Ness to Banks. Many san Lesic Banks do Traic insurance to cover losses associated with Ted  Itow ctr As u do Contr noted service your Community hunk is backed by the . Tot Crement which does not Purchase insurance to cover its losses. It should also be remembered that bad debt insurance costs Money and As losses mount so do inc premiums eventually paid by inc consumer a poster detailing our terms and poli cies of services authorized by Dod b displayed in every Community Bank. In addition every account Holder is provided a copy o these same business conditions when an account is opened. The Soccol be for Blank Sun iils and checking withdrawal slips helps offset the costs associated with the special handling requirements. Each Blank withdrawal slip must be encoded Wilh your account num Ber by hand with a special magnetic encoding device so that ii can be processed through Normal computer channels l a. Fortunately extra work and machinery necessitate extra charges. Using your pre uncoiled withdrawal slips will avoid this charge. Also while we ton l credit 50 cents to your account every time a Deposit is made we do pay you a s a percent annual percentage rate for savings funds kept on Deposit with the Community bunk. To avoid paying the so cent service charge and to save Lime standing in line we entourage you to use our express Teller machines. They Are conveniently located in More than 7d situs in Germany Holland and the United kingdom. If you have additional questions or com ments please do not hesitate to Contact your Bank Liaison officer or your Community Bank manager