Professor Richard M. Alderman, Associate Dean at the University of
Houston Law Center, who is known to many as "The People's Lawyer", answers your most common questions. If you have a question pertaining to the law in Texas, please e-mail Richard at peopleslawyer@www.law.uh.edu. This page answers your questions on Banking
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A. Under Federal Law, there are time limits on how long a bank may "hold" a check before they let you either withdraw cash or write other checks against it.
Basically, the law divides checks into two categories, local and nonlocal checks. In both cases, the first $100 of a deposit generally must be available for withdrawal the first business day following the business day of deposit. Saturday, Sunday and holidays are not business days. If a local check is deposited, the rest of the funds generally must be available to the customer no later than the second business day after the business day the check is deposited. If the check is a nonlocal check, the rest of the funds generally must be available not later than the fifth business day after the business day on which it is deposited.
In your son's case, the check appears to be nonlocal. This means he should be given access to $100 of the deposit the next day, and the remainder in five days. Remember, however, the days the law uses are business days. Saturday and Sunday are not business days. Therefore, it actually may be seven days before the law's five day limit has run.
If you want to know more about this law, contact your bank. They should have a pamphlet that fully explains how the Funds Availability Law works.
Q. My bank just charged me $25 for bouncing a $15 check. Can they do this?
A. Yes. What your bank charges for its services is between you and the bank. If you are unsatisfied with their fees I suggest you shop around for a new bank.
Q. I gave someone a check, post dated. I assumed that it couldn't be cashed until the date on the check. I intended on putting enough money in the bank to cover the check before it was cashed.
The person I gave it to deposited it in his bank the day after I gave it to him. My bank paid the check, and this caused several other checks of mine to bounce. The bank has charged me $25 for each check that bounced. Is this legal? How can the bank pay a check before its date?
A. You are not alone in thinking that when you give someone a post dated check that it cannot be cashed before its date. Unfortunately for you, banks generally do not check the date on a check before they pay it and have no liability for paying a post dated check early.
Under recent changes in Texas law, a bank may pay a post dated check even if it causes other checks to bounce. If you want to make sure that a post dated check is not paid, you must inform the bank and ask that they not pay it early.
This does not mean, however, that you have no legal rights to collect the money you paid for the checks that bounced. As far as I am concerned, the person you gave the post dated check to should be liable for the charges.