Federal law does not regulate the order that banks post checks to your account, but some state laws might. Because checks come to the banks in bundles, banks cannot determine the exact order of the checks received or which checks are the most important to process. Banks' computer systems process checks that come in each day - these checks may be processed randomly, from the largest to the smallest check amount, or based on some other method.
Banks that post the largest checks before the smallest checks assume that larger checks may be the most important payments being made by the customer, for items such as mortgage or rent payments or auto loans. You may want to check with your bank to ask about the method they use for posting checks.
Banks can place "holds" on checks for a variety of reasons. Most commonly, banks hold a check because the collection of the money may be in doubt or the check looks suspicious for some reason. Holds may also be placed when a large dollar amount (more than $5,000) is deposited or when funds are deposited into a new customer's account.
A federal law, the Expedited Funds Availability Act, contains rules that allow banks to delay or
"hold" funds deposited by check. You may want to review the account agreement you received when you opened your account for details about your bank's funds availability policies and procedures.
There is no federal law that requires a bank to cash a check, even a government check. Some banks only cash checks if you have an account at the bank. Other banks will cash checks for non-customers, but they may charge a fee. You should shop around for the bank that best meets your needs.
Under the Credit Accountability and Responsibility Disclosure Act of 2009 (CARD Act), a bank cannot increase the interest rate on your fixed-rate credit card or make other major changes to the terms of your account unless it tells you about the change in writing at least 45 days in advance. The bank also has to give you the option to reject the change before it becomes effective. However, if you do not agree to the change, the bank could prevent you from using the credit card any further and make arrangements with you to pay off the outstanding balance. Your credit card account agreement will tell you whether you have a "fixed" or "variable" interest rate.
Also under the CARD Act, a bank cannot treat your payment as late and charge late or penalty fees unless it sends your monthly credit card statement at least 21 days before the payment is due.
Generally, there is no federal law that requires your bank to return your original check. Many banks destroy original paper checks after putting them into electronic form, often to save the expenses of storing or mailing paper checks. Increasingly, check processors make electronic images of your checks and destroy the paper checks that you wrote. A law called Check 21 gives you the same legal protections whether your bank sends your original paper checks back to you or sends you images of your paper check. Please refer to the Board of Governor's pamphlet "What You Should Know About Your Checks" for more information.
Yes. Under Regulation B, a bank must send you an adverse action notice if it takes an action that negatively affects a loan that you already have. For example, the bank must send you an adverse action notice if it reduces your credit card limit. If the basis for the bank's action is information that it got from a credit bureau, that will be stated in the notice along with the credit bureau telephone number. That information is required by law so that you have the opportunity to follow-up with the credit bureau if you think the information is wrong. Please see the How to Dispute Credit Report Errors link to get more information on this.
If you don't understand why you received the adverse action notice (sometimes referred to as a credit denial notice), or if you want more information about the notice, you should contact the bank that sent you the notice. The bank is required to list its name and address on the notice.
There is no federal law preventing a bank from changing the interest rate it pays on your deposit account, or charging additional fees for maintaining your account. However, federal law usually requires a bank to let you know about such changes before they take effect. Notices about interest rates and fees may be printed on your monthly statement, sent to you in a separate letter, or included with other information in a pamphlet or brochure. The bottom line is that you should carefully read the information a bank sends to you.
Yes. The bank is asking for additional information, because federal law requires banks to complete forms for large and/or suspicious transactions as a way to flag possible money laundering. These forms go to the Internal Revenue and the Department of Treasury's Financial Crimes Enforcement Network ("FinCEN"). Federal law defines a "large" transaction as a transaction or series of transactions totaling more than $10,000. A suspicious transaction is one where the institution has reason to believe that or is unsure whether there is suspicious or illegal activity going on. A bank faces large money penalties and its employees may be imprisoned for not complying with the federal law.
The interest rate established by the Federal Reserve is actually a target rate for the interest rate at which depository institutions lend balances to other depository institutions overnight. This so-called "federal funds" rate is important for monetary policy, but does not directly affect the interest rate established for your home mortgage. The interest rate on your mortgage is established by your lender according to the terms and conditions of your loan contract or promissory note. If you have a "fixed-rate" home loan, your interest rate is locked in for the duration of the loan. If you have a "variable-" or "adjustable-" rate loan, your interest rate could change throughout the life of the loan depending on the loan terms. Your loan contract or note with the bank will tell you how your bank determines changes to your interest rate.
Yes. To avoid fraud, a bank is required by law to verify the consumer's identity and form a "reasonable belief" that it knows the true identity of the consumer. Usually, a bank does this by asking to see a valid government-issued identification bearing a photograph or similar safeguard, such as a driver's license or passport. More information: http://www.fincen.gov/finalciprule.pdf
