A Senate committee warned yesterday that unless the Federal Reserve Board takes action, it will consider legislation dealing with the way many banks use customer deposits for profit while delaying customers' access to their own funds by "holding" checks.

Sen. Christopher J. Dodd (D-Conn.) made the threat at a hearing intended to publicize how individuals and small businesses are inconvenienced or harmed because they can't get their money as soon as they deposit a check, although they often are earning interest on it.

Dodd said he would introduce legislation unless the Fed agrees to carry out recommendations made in 1979 by an American Bankers Association task force. The recommendations urge that, as a minimum, the Fed write to all bank directors suggesting that they voluntarily make all their customers aware of the existence and terms of their delayed-funds-availability policies, as the "hold" is formally known.

The Federal Reserve Bank of Atlanta issued a study in January saying that 80 percent of the 125 million commercial (nongovernment) checks processed daily under the best conditions could be cleared within 1.9 days. (Actual time varies between one and six days, according to the Fed.)

The problem comes when a check is returned unpaid. Then it must be rerouted manually through all the banks involved in clearing it, a procedure that can take double the amount of time required to put it in for collection.

Financial institutions impose holds to protect themselves against bad checks, whether due to insufficient funds, forgery or fraud.

The most trouble involves new accounts and unusual transactions such as the sale of a house.

A telephone survey of 20 area banks and savings and loans conducted yesterday by The Washington Post shows a wide variance in maximum holds. For a $1,000 personal check written on a New York City bank and deposited to an existing account in a Washington bank, anywhere between three and 10 business days can pass before a customer gets access to the funds.

Checks written on local banks and deposited in other local banks have a hold of between one and five days. Most banks emphasized that these are maximum delays they impose and that the actual average time is considerably shorter.

Savings and loan associations require more time because they must clear checks through the banking system. The maximum for the same out-of-town check at S&Ls ranges between seven and 15 working days. For local checks, all of the S&Ls surveyed said the longest delay is seven days.

While recognizing the legitimate need for protection, critics charge the banks with overkill. Dodd cited a 1973 study showing that banks lost $5 million a year from uncollectible checks, an amount that probably has more than doubled by now. Nevertheless, because that represents less than one percent of all checks written, he questioned why the other 99 percent of check writers should suffer.

Not only do banks impose an inconvenience on customers, they make a profit doing it by investing the funds at market rates after the check has cleared and before the funds are turned over to the owner.

Subcommittee Chairman John H. Chafee (R-R.I.) declared, "In a period of high interest rates, this practice is especially lucrative for banking institutions, and costly for the customer.

"When the hold is routinely extended, without indication of particular risk, this practice, at best, becomes a hidden cost of checking and, at worst, a genuine consumer abuse."

Dodd calculated the value of the "float"--the amount of interest banks earn on customers' funds--at $1 billion a day. However, it is not known how much of this is profit.

Both the industry and the Federal Reserve oppose any move to set limits on the number of days banks can hold checks before releasing funds. They say not only would it be impossible to define the proper period due to vast differences in banks' experiences with the clearing process, but any maximum would become the industry standard, thus worsening the situation for many customers.

The solution, according to the Fed, lies in speeding the process of returning bad checks. It also urges increased use of electronic funds transfers, which eliminate the need for a hold.

Yet, because they also eliminate the check float for the consumer, types of instantaneous banking such as having payment automatically deducted from one's account at the point of sale is not that popular with the public.

Recognizing that holds are bad public relations and in some cases can put them at a disadvantage with their competition, banks are trying various means to remedy the situation.