Topic: Cashier’s Checks
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Are financial institutions required to wire funds to settlement agents for real estate loan closings? We have had instances where we have had to wire funds from one account at our bank to another account at our bank. Is there an amount limit? Would we be exempt as a national bank?
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No, we do not believe financial institutions are required to wire funds to settlement agents for closings. Although the use of cashier’s checks generally is limited to disbursements of less than $50,000, Illinois law does allow options other than wired funds for disbursements of $50,000 or more at real estate closings (including cashier’s checks in…
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A customer purchased a money order from our bank, but the money order was intercepted and fraudulently cashed by an unknown third party by mobile deposit at another financial institution. The money order was signed by our bank and drawn from our account. Our customer discovered the fraud when they received notice from the intended payee that their payment was never received. The customer is requesting a refund. What should we do?
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We do not believe your bank is obligated to refund your customer. We believe that your bank may assert a claim against the presenting bank for breach of its presentment warranties and refund your customer as a courtesy. To begin, we note that under Illinois case law, the money order you described would likely be…
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We issued a cashier’s check to a customer for an escrow overage in 2018. The customer has not cashed the check and did not respond to a letter we sent notifying them of the outstanding check in June 2020. The customer also has a demand deposit account (DDA) with a negative balance that we charged off in October 2020. Can we apply the outstanding cashier’s check to the negative balance on the DDA instead of sending it to the State Treasurer? The amount of the check is beneath the threshold requiring customer notice under the Illinois Revised Uniform Unclaimed Property Act (RUUPA).
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No, we do not believe you may apply the cashier’s check to the negative balance on the customer’s DDA to avoid remitting it to the Illinois Treasurer. Additionally, although you are not required to notify your customers of abandoned property valued at less than $50, you still must report and remit such property to the…
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We have an elderly customer who seems to be the victim of a home improvement scam. The scammers want her to wire money to a fake healthcare company. We refused to send the wire, but our customer withdrew a cashier’s check for the same amount from one of our tellers, who was unaware of the situation. I know that we cannot normally stop payment on a cashier’s check, but this is blatant fraud. Our customer is adamant that the transaction is legitimate. Is there any way that we can prevent this fraud from occurring?
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You are correct that your bank cannot stop payment on the cashier’s check without risking liability for the check. We believe that you should instead file a suspicious activity report (SAR) and report the scam as potential elder financial exploitation to the Illinois Department of Aging. As a general rule, once a cashier’s check enters…
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We have an unclaimed cashier’s check, very low-value, payable to a customer whose last-known address is in Missouri. Do we need to report the cashier’s check to Missouri?
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The Illinois Treasurer’s office has advised us that a best practice is to report unclaimed property to the state that has priority in the property. In this case, that would mean reporting and delivering the property directly to Missouri. However, the Treasurer’s office does regularly remit unclaimed property to states with which it has reciprocity…
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We have an auto-renew certificate of deposit (CD) that we have identified as unclaimed property, but it will not mature until mid-2022. Should we submit a report once the CD matures in 2022 so that the owner does not miss out on interest? Should we submit it as a cashier’s check?
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Yes, we believe that you may wait before reporting and delivering the CD as unclaimed property until the next applicable reporting date after it matures in 2022. Under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), an automatically-renewable CD would be presumed abandoned three years after the most recent indication of interest “following the…
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Can we send the due diligence letter required under the Illinois Revised Unclaimed Property Act (RUUPA) to the remitter of an abandoned cashier’s check instead of the payee since the payee is not our client and we do not have their contact information? Also, can we place a stop on the cashier’s check if the remitter signs an indemnity bond and reimburse them for the check instead of having it escheat?
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We believe that sending a due diligence letter to the remitter of an abandoned cashier’s check would fulfill the Illinois RUUPA’s notice requirement if the cashier’s check has not yet been delivered to the payee. Under the Illinois RUUPA, holders of abandoned property must send due diligence letters as notice to the property’s apparent owner…
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We discovered that a cashier’s check issued on behalf of our customer was deposited and cleared at another institution, without the payee’s official endorsement. The check’s payee said that they do not bank with the other institution and the other institution stated that we need to submit a forged endorsement case so they can research it. How should we submit such a case? We have an “Affidavit of Alteration or Other Fraudulent Act” form, but we do not know whether the customer or the bank should sign and complete it, since it was a cashier’s check drawn on our bank’s account. Additionally, are there any Illinois Uniform Commercial Code (UCC) provisions we should consider?
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We believe that the “Affidavit of Alteration or Other Fraudulent Act” form should be signed and completed by your institution, as the relevant cashier’s check is a draft drawn by your bank against its own account. Your bank’s “Affidavit of Alteration or Other Fraudulent Act” form states that an account owner must sign and complete…
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When cashier’s checks must be remitted to the state as unclaimed property, should the funds be remitted in the name of the remitter or payee?
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We believe that cashier’s checks presumed abandoned may be reported to the Illinois Treasurer with the name of the payee, or in the name of both the payee and the remitter (also referred to as the purchaser). The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires that reports of property presumed abandoned must include…
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Under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), we are not required to notify customers about abandoned cashier’s checks, money orders, or certificate of deposit interest checks with values below $50. If the payee on one of these types of checks has an active deposit account at our bank, may we credit the amount of the abandoned item to the deposit account, or must it escheat to the state?
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We do not believe that the Illinois RUUPA would allow a bank to credit amounts due under abandoned items to the customer’s deposit account in order to avoid remitting those items to the Treasurer, and we do not recommend this practice for the reasons discussed below. While you are correct in stating that you are…