Topic: Cashier’s Checks
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An elderly customer purchased a $9,000 cashier’s check. She came in the next day to request a stop payment, as she now believes that she was defrauded — she had received a telephone call from someone claiming to be with Publisher’s Clearinghouse, who told her that she had won and needed to send in a $9,000 cashier’s check to withdraw her winnings. Can we stop payment?
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No, we do not believe that you should stop payment on the cashier’s check. The Illinois Supreme Court has held that a cashier’s check is the equivalent of cash. As a general rule, once a cashier’s check enters the stream of commerce, the issuer (your bank) is liable under the Uniform Commercial Code (UCC) if…
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Three years ago, a small business customer purchased a cashier’s check in the amount of $5,500 payable to a car dealer for the purchase of a car. The car sale fell through and the cashier’s check was never presented to the dealer. Subsequently, the company went through bankruptcy and closed its account with us. Now the president of the company would like us to reissue the check to her personally. Can we do that? I don’t want any trouble with the bankruptcy court.
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We believe that you may reissue the cashier’s check, but only if the request comes from the company’s bankruptcy trustee or a successor-in-interest to the trustee. The Illinois Supreme Court has recognized that the remitter of a cashier’s check remains the owner of the check until it has been remitted to the payee, and therefore…
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We have a customer who is refusing to enter a remitter for a cashier’s check. We believe that the customer should enter in a remitter, for BSA purposes. The customer is very upset and wants to leave the remitter line blank. Is there any regulation we can point to?
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We are not aware of any law or regulation that requires a bank to identify a remitter on a cashier’s check. However, both the Illinois Currency Reporting Act and FinCEN regulations require banks to obtain and record certain information for cashier’s checks issued for $3,000 or more, including the identity of the purchaser. In keeping…
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A customer ordered a cashier’s check from us for a real estate loan closing. The attorney at the closing shipped the check using UPS next-day shipping, but UPS has lost the package. The customer would like us to reissue the check. Can we reissue the customer’s cashier’s check?
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Yes, your customer may request a reissued cashier’s check after presenting a declaration of loss for the original cashier’s check. However, this approach carries some risk for your customer, as the declaration of loss will not become effective until 90 days have passed from the date of the original cashier’s check. The Uniform Commercial Code…
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When we issue a cashier’s check with a misspelling or incorrect amount, we mark the check as “void” and then issue a corrected cashier’s check. How long should we keep those “voided” checks?
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We are not aware of any requirement to retain “voided” cashier’s checks. The IBA Record Retention Guide recommends keeping cashier’s check receipts, records, and register entries for five years. However, for a cashier’s check that has been “voided” before issuance due to a typo or incorrect amount, we believe that it is not necessary to…
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Can we place a reasonable cause hold when a customer deposits a check and comes into the bank the next day to request a cashier’s check or wire transfer from the deposited funds? Would such a hold be permissible under Regulation CC?
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Whether you have reasonable cause to doubt the collectability of a customer’s deposited checks and to place a hold on those funds is a highly fact-specific question. “Reasonable cause” requires facts that would cause a well-grounded belief in the mind of a reasonable person. There is no bright-line rule for what constitutes reasonable cause. Therefore,…
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If a customer passed away, and we need to issue a cashier’s check to the executor of the customer’s estate or the beneficiary of the customer’s payable on death (POD) account, who should our bank list as the remitter on the check?
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While there is more than one way to clear out an account following the death of a customer, if you use a cashier’s check, we believe the best approach is to list the remitter as follows: Account #12345 of John Doe, deceased.
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A customer purchased a cashier’s check seven years ago. The named payee has not cashed the check, and we do not even know whether the customer has delivered the check to the payee. Can we contact the customer before remitting the check as unclaimed property? And can the customer place a stop payment order on the check and request that the check be reissued?
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Yes, you are required to contact your customer before reporting the cashier’s check as unclaimed property. And no, the customer cannot issue a stop payment order on the cashier’s check if it already has been presented to the payee. However, if the cashier’s check has not been presented to the payee, the customer can surrender…
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Can we put a stop payment order on a cashier’s check that our bank issued? The customer has been the victim of identity theft and did not order the cashier’s check.
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No, we do not believe you should issue a stop-payment order on the cashier’s check. The Illinois Supreme Court has held that a cashier’s check is the equivalent of cash. As a general rule, once the cashier’s check enters the stream of commerce, the issuer is liable under the UCC if it refuses to honor…
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We are changing several of our fees and plan to provide advance notice of our increased overdraft fees. Is there an advance notice requirement for cashier’s check fees and safe deposit box drilling fees?
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We agree that you should provide advance notice of an increase in overdraft fees, as Regulation DD requires you to provide advance notice of any change in terms that will adversely affect your customers at least thirty calendar days before the change takes effect. 12 CFR 1030.5(a)(1). We are not aware of any requirement for…