Bank of America’s “Out of State” Check Policy
Pop quiz time…
Question: When is an in-state check an out-of-state check?
Answer: When you have a Bank of America account and you move.
Prior to our move I went to great pains to ensure that we’d have a smooth banking transition when we moved. I researched the options (SunTrust vs. Bank of America) and decided on Bank of America. I also asked all the right questions… Like “Does it make any difference if we open the account here (prior to our move, which was more convenient) or should we open it on the other end.” The answer was that a Bank of America account is a Bank of America account no matter where you open it.
As it turns out, that’s only partly true. My first tipoff was when I went to deposit a check at the service counter and was told that I would have to re-write the deposit slip using one of their special ‘out-of-state’ deposit slips. It turns out that their system automatically bases the in-state vs. out-of-state determination on where you opened the account, not on where you live. At first blush, this wasn’t a terribly big deal… All I needed to do was use a special form on those (relatively) rare occasions when I deposited a check at a teller window. But upon further questioning, I also learned that such checks (including work reimbursements, which aren’t terribly uncommon) would be subject to a lengthy hold (as much as 7-9 days) simply because they were thought to be out-of-state, even if they weren’t.
The solution to this problem? Amazingly, they can’t simply modify your account. Rather, you have to open a new Bank of America account and shut down the old one. Great. Now instead of changing bank accounts once, I got to do it twice. I actually considered just switching banks out of spite, but Bank of America really does suit our needs, so I took a deep breath and went ahead with the change. The nice thing was that I was able to do this without creating a new online banking login, so I didn’t have to re-enter our online bill pay details, etc. Rather, the new account shows up alongside our old one when we log in. Once the dust settles and we’re sure everything on the old account has cleared we’ll go ahead and close it down. All in all our banking transition was not terribly difficult, but it certainly ended up being a lot more complex than we expected.
For more information on moving, check out my Roadmap for a Successful Relocation.
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This isn’t entirely Bank of America’s fault. I had a BofA account in MD precisely because I thought I could do seamless banking, i.e. make ATM withdrawls in San Francisco and deposit any checks in SF that I didn’t have time to deposit before going out there. However, banking is regulated at the state level and that’s part of the reason why you have close and then reopen if you don’t want your check to be considered out of state. Weird stuff, I know. I suggest anyone who’s a banking law expert weigh in on this since that was just an explanation I got from a teller in SF.
Holding the check for an stupid amount of days makes no sense. The whole point of the check 21 thing is to reduce the number of days a check floats, etc right? So then why old a deposit for 10 days if it’s all eventually ones and zeros moving around electronically?
Comment by mapgirl — Jul 12th 2006 @ 12:35 pmI went through that with BoA. My first tip-off was that CA BoA accounts have 10 digits, and WA accounts had 8. And that screwed everything up, it seemed. But I went ahead and kept the WA account in CA because I knew I wouldn’t be living there too long. Once we got to TX, I decided to boot BoA to the curb for a different bank altogether.
And then the first 5 people I talked to on the phone about closing the WA account told me that I had to physically go to the branch where I opened the account — 10 years earlier, when I was in college! — to close it. I kept calling until I got someone who could do something different. [Though they made me write a check to myself to get the account balance below 100 dollars before they'd close the accaount and mail me the remaining amount.]
Comment by Terri W. — Jul 12th 2006 @ 12:37 pmWhen I moved to CA, B of A would not allow me to open an account because I did not yet have a CA driver’s license. I walked across the street to American Savings (now WAMU) — no problem.
Comment by maribeth — Jul 12th 2006 @ 12:59 pmmapgirl: I realize that this isn’t entirely BofA’s fault. However, their inability to articulate this problem when I specifically asked about the (dis)advantages of opening the account on one end of the move or the other is 100% their fault.
WACHOVIA HAS THE SAME ISSUES EECEPT THERE IS NO HOLD ON $, THE ONLY DIFFERENCE IS THE ROUTING NUMBER SO FOR SOME ONLINE THINGS IT SAYS WACHOVIA VA
Comment by ROB — Jul 12th 2006 @ 1:41 pmThe first $100 must be available by the next business day, the next amount up to $4999 must be available with in 5 business days. The longer hold times would only apply to the portion of the check that exceeds $5000. This is per regulation CC.
Comment by Jason — Jul 12th 2006 @ 1:55 pmI ran into the same problem with Homestreet Bank. My bf used online banking to transfer money from his homestreet account to my homestreet account. From some strange reason the clearing house they use for electronic banking mailed me a check instead of doing the transfer electronically. And because the clearing house bank is out of state, Homestreet put a hold on the check!
Comment by kassy — Jul 12th 2006 @ 2:20 pmI’m dealing with the same thing. I opened my BofA account in Virginia where I am attending school. Now that I am home in Missouri for the summer they do seem to hold my checks for a longer than normal time. I figure it is worth it though since BofA was the only bank with locations in both my hometown and the town where I attend school.
Comment by Andy — Jul 12th 2006 @ 4:25 pmnickel, I agree with you on poor articulation. Like I said, verify what the teller in CA told me when I was making that counter deposit. I hardly think they got it completely right and I am certain there is more to it that state banking laws and jurisdictions.
Though I do know that regional differences mean the banking products available to you vary by zipcode, etc. That’s certainly true about usury laws in some states as far as credit cards go, but I’m no expert on this. I just read the fine print and ask myself why does it matter where I live what I get charged?
Comment by mapgirl — Jul 12th 2006 @ 5:33 pmDidn’t realize this in florida, but my friend made payroll deposit at B of A in Florida, drawn on Ohio bank. Wrote me a check which I deposited in local account, I then wrote a check and mailed it to Well Fargo. Well, you can see the problem. The check I deposited, was declined, The check I wrote to Wells was then declined for non-sufficient funds (30.00) charge to me. The check written to me was also returned for same reason, another $30.00 charge. Looks like another bank scam to me. We will be making a trip to B of A today to get big picture and close account if necessary. A 10 day hold on a check from major U.S. Corp. is just not good business.
Comment by Lynn Bradford — Jul 14th 2006 @ 8:50 amThis is all very strange. I just moved out of state with a BofA checking acoount, and after hearing all this I headed over to the branch today to transfer my accounts. But the rep I spoke to said all I needed to do was give them my new address (and I’d already done that online). So I have no idea what the deal is. I did find out that California is an exception, since it’s apparently not tied in to their national system, but from what she said that’d be the only case where I’d need new account numbers.
Comment by Catrijn — Jul 15th 2006 @ 12:08 pmBofA couldn’t accept ATM deposits to my WA-based account when I was studying in Washington, DC for three months. I asked when they planned to update their computer system to make this possible. Their answer: “Never.”
I had my WA-based checkbook stolen while I was living in CA. I ran to the nearest CA branch and asked for help - they were unable even to access my account to check the balance (odd, since that had always worked before). They definitely could not freeze the account, close it, or do anything more complicated and urgently necessary. Eventually I closed the WA account and opened a CA one….then the same person who stole my checkbook walked into a CA branch (guessing that I still had a BofA account, I guess), gave them my name, and withdrew $3,000 cash without needing to show ID. That was the last straw. Now I use Wells Fargo.
Comment by BD — Jul 17th 2006 @ 12:04 pmIt shouldn’t come as a surprise to anyone. BofA should have everyone in management hauled off to jail.
Comment by BofA Victim — Jul 24th 2006 @ 9:05 pmAs crazy as it may sound, Bank of America is actually in the process of phasing out the “Out of State” Deposit slips. Behind closed doors, bank of america is preparing for a major computer system overhaul that will occur in September 2006. When the upgrade is finished, every branch, ATM & account will be on the same computer system.
I have ran into instances where I will deposit a Bank of America Check (Drawn from California) into my washington checking account, and they put a hold on the check (minus the first $100,) even though the check is a “On Us” item. Or, once upon a time, when I was traveling, I couldnt make a deposit in a out of state at the ATM. The upgrade in september is meant to fix all of that. And watch for your statements to change… they wont look like they are from the 1980’s anymore. The bank will offer “Check Imaging Statements,”for free, which is a service where the bank prints copies of your canceled checks with your statement for you to review.
And a note on state regulations… The probelms being experenced by the individuals above are not in any way blameable on state regulations. Bank of America N.A. (National Association) has a national charter, and is regulated at the federal level. The probelms experenced above are a result of the bank’s legacy policys from all of the mergers through the years. You will find that the computer upgrade in september will fix these problems, and Bank of America will truely be a national bank.
Comment by Ken — Jul 27th 2006 @ 12:40 amBank of America sucks. They say they are placing a 12-day hold on a 20K deposit I made, money I need to have available in 7 days to purchase a house. 12 days! I am going to fight these dirty bastards on this. They HAVE the money and don’t want to give it out because it helps them investing money to have all this extra money around.
I can’t believe you stayed with BOA. I know someone with SunTrust who just deposited 150K and it took two days.
Comment by Rich Hunter — Sep 21st 2006 @ 4:59 pmRich, that really sucks. In our case, we had a tight turnaround between selling our old house and buying our new one, so we had the money wired. It was available immediately. It’s too late for you now, but if you need instant access, it’s probably worth the $25-$35 fee for wiring.
My payroll check was held for 12 days in which I had deposited before and didn’t have it held. Spoke to a BofA manager and she said it would be available on the 11th. It was acutally the 12th when it was available. Anyway my rent check bounced and I am bouncing to another bank. How come my rent check (Out of state check) bounced when my Payroll check from a Virginia based (in state) company was held for 12 days? So my check can process in 3 days and it takes a payroll check which I have been receiving for years all a sudden held for 12 days. This was the cream on the cake amoungst other issues starting last month. This is when BofA executed two online payments that we cancelled becuase we paid double the prior month. This was becuase we wanted to take care of bills so we can focus on xmas gifts. Well those payments went through and the supervisor said “sometimes it cancels and sometimes it just sais it cancells you have to check it the next day. Well it set us back $1600 and bounced 3 checks and many other fees. Lets just say BofA didn’t care or even lift a finger to assist, even when the payee rejected the payment returning it to BofA in a week. They acknowledged it was a banking error but I was stuck with +$300 in over fees and returned check fees. It was a wonderful xmas.
Comment by Tom — Jan 13th 2007 @ 7:43 pmI have an even better story. When I first moved to WA state, I open an account a new account, and deposited into it cash and certified bank check (from an Indiana bank). They had a hold on the whole thing for about 2 weeks. I thought I was going to blow my top. They were nice enough to make an exception for about $500 so that I could pay my security deposit. … but given that I’ve a lot more cash into the account, I have no idea what the deal was.
Comment by Mark L. — Jan 17th 2007 @ 3:34 pmPersonally I have all big banks and do not use them. You will always get a better service from a local bank. That’s what I use for my business banking, and I use Ascencia bank for my personal banking (internet bank).
Upgrading legacy systems in 2006 - I don’t think so. It’s May 2007, and I just moved from California to Illinois and heard the same story from the branch manager. He said they would not be able to service my account and my check and cash deposits would be held up. He suggested opening a new IL account. Isn’t this Bank of “America”? If I need a new account #, new checks, and have to update direct deposit, PayPal account, automatic wiring, I’ll just switch to Chase… Not happy
Comment by Harald — May 24th 2007 @ 7:50 pmJust received proceeds from the sale of my condo in 3 checks of 100K, 100K & 93K. Deposited the 1st check into Wells Fargo. Was told funds would be available the next day. Deposited the 2nd 100K into Santa Barbara Savings and was told it would post the same night and be available in the morning. Tried to deposit the 93K check (all 3 from same Escrow company in California and my banks are in the same town) and was told there would be a minimum 2 day hold and as much as 11 days. I told them about the other checks and banks and they said they couldn’t help me. I told them they just lost a customer and a healthy deposit. This happened 10 years ago with B of A with a sale of my previous home and they did the same thing. I closed the account and switched to Wells Fargo. My fiance has her account at B of A so we opened a joint account. Dejavu. This one will be closed post haste. I truly believe if someone did the math they would find that B of A is making millions of dollars on check holds when they should not be on hold. I thought there was a recent law that in State checks can only be held for a day and out of State for 3 days. Does anybody know about this? I would love to see an investigation.
Comment by Allan S. — Jun 20th 2007 @ 12:05 amI dont think it matters what bank you deal with it all depends on what the size of your account is from day to day the larger it is the faster things get done.In 1973 i was told an out of state check would take 5 days to clear and being in the Army I had no option but to wait. A nd here we are 35 years later and the banks havent moved into the techno world,come on give me a break….
Comment by Richard Willoughby — Feb 7th 2008 @ 11:56 amI just ran into the same 12 day problem with BoA. Apparently, I could open an account in New Jersey, go to California, deposit a California check and it would be considered out-of-state. A NJ check deposited in California to the same account might be in-state. Makes no sense.
Comment by Rich — Mar 13th 2008 @ 9:05 pm