It’s my understanding that since the novel inception of the Automated Clearing House system and its now widespread use, that most checks clear almost immediately. Gone are the days when the check you wrote had to be physically transported to a clearing house bank halfway across the country. Given the use of this new technology, its inconceivable that banks “hold” the deposited funds until the check “clears,” because it’s cleared almost instantly. But I think this is still the norm at a great many banks – who require 5-7 days for availability of funds. The fact of the matter is that because of the ACH system, any witholding of deposited funds pretty much constitutes outright theft by the banking establishment. The only reason they would hold that money is so they can earn interest on it for 5-7 business days before releasing it to its rightful owner.

Which brings me to a downright ridiculous anecdote: Last week my brother received an institutional payroll check. He lives in a small town, which basically lives & breathes because of the University he works for. If a check drawn on Adrian College’s account bounces, the city of Adrian is fucked with a capital F. So, despite the fact that payroll checks have historically been sacred (most of the country operates with a zero/minimal balance in their checking accounts) and exempt from this hold, my brother decided to play it safe. He presented his paycheck to the bank, and asked to cash it. They gave him cash. Real money. A few hours later, he returned, cash in hand, and deposited the cash in a face-to-face transaction with a real live teller. Now, surely this money would be available to him in an ATM transaction on saturday?

Wrong.

Basically, what LaSalle told him is: We’re keeping your money as security for the check that hasn’t “cleared” yet. Despite the fact that they honored the check and gave him cash, they are now holding the cash pending clearance of the check (which is a non sequitir because of ACH). They did, however, offer that he could withdraw money from an ATM if he wouldn’t mind a pesky overdraft fee of $32.

So, they honored his paycheck. Gave him real cash for it. And when he put the real cash back in the bank, they decided he couldn’t have it until after the holiday weekend. There was real money, from a check that had cleared in his account, which the bank was unwilling to let him have. But, they were willing to sell him some other money for a service charge of $32.

…if that’s not theft, I don’t know what else to call it.