We recently had a non-customer call and request a copy of a check payable to her from December 2015 that her sister deposited into an account at our bank. We have a letter from the non-customer requesting that we allow the sister (our customer) to deposit the check, a copy of the non-customer’s driver license, their endorsement on the check, and the check stub. Do we have any obligation to provide the non-customer with a copy of the check?

No, we do not believe any federal or state laws or regulations would require you to provide a copy of a check to a non-customer. The Uniform Commercial Code (UCC) requires that banks “maintain the capacity to furnish legible copies of items until the expiration of 7 years after receipt of the items,” but the legible copies must be made available only on a customer’s request.

Additionally, we do not believe you bank could be held liable for reimbursement of the check at this point, since it appears that the three-year statute of limitations on claims for conversion has passed — unless your bank was found to have fraudulently concealed the conversion. Under the UCC an action for conversion must be commenced within three years after the cause of action accrues. Here, any cause of action would have accrued more than three years ago — when your customer deposited the check into their account in 2015. Additionally, Illinois courts have found that this statute of limitations will not be tolled due to an individual’s failure to discover a bank’s conversion of an improperly endorsed check within the time limit, unless the bank fraudulently concealed the conversion.

For resources related to our guidance, please see:

UCC, 810 ILCS 5/4-406(a) (“A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount, and date of payment.”)

UCC, 810 ILCS 5/4-406(b) (“If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of 7 years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.”)

UCC Official Comments, Section 4-406, Comment 3 (“ . . . Under subsection (b) retaining banks may destroy items but must maintain the capacity to furnish legible copies for seven years. A legible copy may include an image of an item. . . .”)

Illinois UCC, 810 ILCS 5/3-118(g) (An action “(i) for conversion of an instrument, for money had and received, or like action based on conversion [or] (ii) for breach of warranty . . . must be commenced within 3 years after the cause of action accrues.”)

Illinois UCC, 810 ILCS 5/3-420(a) (“The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be brought by (i) the issuer or acceptor of the instrument or (ii) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.”)

Hawkins v. Nalick, 2012 IL App (5th) 110553, ¶ 29 (“Accordingly, in the present case, we believe that we must apply the three-year statute of limitations notwithstanding the plaintiff’s failure to discover the forged endorsement within the time limit. The plaintiff’s claim for conversion accrued when Nalick deposited the check with the forged endorsement, but the plaintiff did not file her claim until over three years after her claim for conversion had accrued. Because the plaintiff’s claim is subject to the three-year statute of limitations provided in section 3-118(g) of the UCC and she has not alleged any fraudulent concealment on the part of the bank, we must hold that her claim is barred by the statute of limitations.”)

Kaplan v. JPMorgan Chase Bank, N.A., 2015 U.S. Dist. LEXIS 63508 at *29 (N.D. Ill. May 12, 2015) (“‘The discovery rule is a judicially created rule that tolls the beginning of a statute of limitations until the injured plaintiff knows or reasonably should know that she has been injured and that her injury was wrongfully caused.’ . . . Illinois courts have held, however, that ‘the discovery rule does not toll the running of the three-year statute of limitations set forth in section 3-118(g) of the UCC.’”)