Yes, we believe that your bank may reject the deposit of a check if you are aware that the drawer’s account has been closed (presumably because it is an “on-us” check). The Uniform Commercial Code (UCC) requires banks to accept customer deposits that are “properly payable,” but a check drawn on a closed account does not meet the UCC’s definition of properly payable. Consequently, your bank is not required to accept the deposit and may stamp it “account closed.”

For resources related to our guidance, please see:

• UCC, 810 ILCS 5/4-402(a) (“Except as otherwise provided in this Article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it had agreed to pay the overdraft.”)

• Illinois UCC, 810 ILCS 5/4-401(a) (“A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.”)