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by lxgr 472 days ago
For very different reasons, though: If the check bounces, the bank potentially takes the loss if the depositor has already withdrawn/spent the funds.

In other words, this is a direct credit risk to the bank, not the more indirect reputational or relationship risk of potentially unwittingly or negligently facilitating a scam described in TFA.
2 comments
jandrese 472 days ago
No bank is going to let you withdraw funds off of that $200k until it actually clears the ACH, plus a couple of days.
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mindslight 471 days ago
Isn't "clear the ACH" actually something like 90 days? Even if that check is drawn on a reputable bank that has those funds (ie doesn't promptly reply with the ACH equivalent of NACK), that balance could just be another link in a chain of fraudulent transactions.

From what I can tell banks generally don't rely on airtight logical guarantees. Rather they have some kind of exposure on every transaction, which they work to reduce. This isn't the most efficient system, but they deal with more types of fraud than just fake checks.

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lxgr 471 days ago
That's usually the problem of the bank that did not decline a check/ACH debit for insufficient balance in time, though.

In other words, "at the time we paid/did not reverse this, we thought the payer account was good for it, but as it turns out it was funded via transactions that ended up being reversed, and now the account is in the red" is not a valid reason to claw back money.

And that makes intuitive sense as well: Only the paying bank has a complete picture of all account activities (including out-of-character/potentially suspicious ones), so it makes sense to primarily hold them accountable.

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mindslight 471 days ago
What is that timeframe though? I had the impression that it's longer than a week, which is the maximum time I've seen banks show newly deposited funds as not available.
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nradov 472 days ago
This is why banks limit funds availability after deposits, especially for paper checks. Most banks will only allow you to immediately withdraw a small amount and hold the rest until the check clears so their exposure is very limited.
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