Depositing these checks into your customer’s account without endorsements could raise a number of concerns. First, your examiners may criticize this practice due to the risk that your customer is using the unendorsed checks made out to a different payee to launder money or engage in other illegal activities. Second, your bank is risking liability to the actual payee of these checks, which are being deposited into your customer’s account.

Going forward, you may want to consider asking your customer to have these checks endorsed by the payee to your customer.