This is my opinion of my treatment by J.P. Morgan Chase, you can view the Federal Reserve regulations on line and determine if you think it is a legalized ripp off.
To be a member of the Federal Reserve System, a bank is required to keep a specified amount of money on deposit. Obviously a bank would not want to keep a large amount of cash sitting in a vault doing nothing. To overcome this problem, they move the amount of funds on hold into the column marked ON DEPOSIT, until the funds are released. The money there is not real money in a sense it is virtual money. So it is to the bank's advantage to find what ever reason that they can to put holds on your deposit. It takes an average of 1-2 days for them to collect the funds.
Consider the On Deposit Requirement as a hay bailer, green grass comes (checks banks can figure out a reason to hold) in the front and accumulates until enough is compressed and a bail pushes out the rear. This bale includes yours and other folks checks which have been on hold. All this time other people's checks are being put on hold and accumulated at the front, so that the bank doesn't have to use their money to make the Feds happy. If they accumulate more than required each day they get "Fed Points", so it it is to their adavntage to hold as many as they can for as lon as they can.
Banks even put holds on checks deposited from their own bank branches. Consider how much they make off of the check you deposited, while you wait for it to be available. I have had wire transfers from large UK banks traveling at the speed of light, take 3 days to reach my account. The profit from this questionably ethical practice is astronomical for a large bank chain. The banks are MAKING HAY and the public is getting zilchl. If I buy something and write a check it can be flushed immediately through my account. If I accept a check it can be held for as long as the bank can think up reasons to hold it.
It is it time that OUR congress people pass laws which prevent banks from using money on hold to satisfy their Federal Reserve On Deposit Requirement!
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