A federal law, the Expedited Funds Availability Act (EFA), or Regulation CC, provides exceptions that allow banks to delay or "hold" funds deposited by check for an extended period of time. When this happens, you must be given a notice stating the reason for the hold and when your funds are available for withdrawal.
As to the bank having a hold on your funds, you should first send a demand letter to the bank's legal department demanding the release of the funds in your account or you will be forced to sue them in court for your funds.
Finally, bank negligence can include a failure to release funds. If the bank will not release funds that are legally yours, you might have a valid legal claim. An attorney can help you understand your rights and responsibilities if your funds are being withheld.
Refer to your deposit account agreement for the bank's funds availability policy. If your bank is a national bank or federal savings association, and you believe it is holding your funds longer than allowed, file a written complaint with the Office of the Comptroller of the Currency's (OCC) Customer Assistance Group.
The Federal Reserve says that a "reasonable" extended hold generally means one additional business day (total of two business days) for a bank's own checks and five additional business days (total of seven) for most other checks.
Contact Your Bank
If deposited funds are being held for a longer period than you expected, it's a good idea to call, email or stop by a branch of your bank to ask about specifics of its hold policy. You can ask your bank to provide an explanation for the hold or sometimes even to release the hold.
As angry as you may be with your bank, filing a lawsuit against them may not always be an option. Most of the time, contracts with financial institutions include arbitration clauses that prevent you from taking legal action immediately. Arbitration clauses limit consumers' ability to sue.
Financial litigators generally have experience representing corporate and individual clients in a wide spectrum of matters involving the federal securities laws, and state corporate, consumer, securities and common laws, and bankruptcy proceedings.
Through the “right of offset,” banks and credit unions are legally allowed to remove funds from a checking account. They can do this to pay a debt on another account that the consumer has with that same financial institution.
The Office of the Comptroller of the Currency (OCC) is an independent bureau of the U.S. Department of the Treasury. The OCC charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.
A bank account freeze means you can't take or transfer money out of the account. Bank accounts are typically frozen for suspected illegal activity, a creditor seeking payment, or by government request. A frozen account may also be a sign that you've been a victim of identity theft.
As a banking customer, it is your right to get fair treatment from your financial institution. The bank cannot discriminate against you on grounds such as sex, age, religion, caste, sexual orientation, and physical ability.
Can Banks Take Your Money Without Your Permission? The short answer is no. Banks cannot take your money without your permission, at least not legally. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per account holder, per bank.
Legal Options
An attorney can help put an end to your bank or financial institution's unfair practices by filing a lawsuit on your behalf. In most cases, these are class action lawsuits because the bank has also harmed many other individuals.
Often, banks will let you withdraw up to $20,000 per day in person (where they can confirm your identity). Daily withdrawal limits at ATMs tend to be much lower, generally ranging from $300 to $1,000.
Conclusion: Going to small claims court may be worth it for $500, but it will determine how you weigh your costs versus benefits. At a minimum, it is worth it to send a demand letter.
You Have A Right UNDER EFTA (Electronic fund transfers act) To Sue Any Bank That Unlawfully Keeps Your Money, Or Who Fails to Follow Your Instructions For Disbursing It. Banks owe you a duty to only give out funds that you authorize, and to only give out funds in the manner that you instruct them.
The debt collector may try to collect the money by taking money from your bank account or your paycheck. You can challenge this, but you must act quickly. You may be able to undo, or set aside, this judgment if you didn't know about it or in a few other situations.
A: To pursue legal action against a bank for causing financial injury, you should consider hiring an attorney with expertise in banking and financial services law, including securities law. Look for a lawyer who has experience in handling cases involving bank errors, unauthorized transactions, and financial disputes.
While there's no set-in-stone timeline on how soon a debt collector can sue, you are more at risk if you have an unpaid debt for more than six months. However, there is a legal timeframe for how long debt collectors can collect debt.
You can sue for money damages, if you can prove liability, but you cannot sue for inconvenience.
According to banking regulations, reasonable periods of time include an extension of up to five business days for most checks. Under certain circumstances, the bank may be able to impose a longer hold if it can establish that the longer hold is reasonable.
Banks have the authority to freeze accounts without advance warning, particularly when urgent measures are required to safeguard assets in cases of suspected fraud or compliance with legal directives.
Generally, a bank must make the first $225 from the deposit available—for either cash withdrawal or check writing purposes—at the start of the next business day after the banking day that the deposit is made. The rest of the deposit should generally be available on the second business day.