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Question & Answer
Question: Somewhere I remember reading about mandatory check cashing for government checks and also maintaining low cost accounts. Can you tell us what is happening to that legislation? Are we obligated to cash government checks for non-depositors?
Answer: Both mandatory check cashing and low cost accounts keep returning to the banking scene in Washington, DC, but to date have not yet become part of our requirements.
Low cost accounts, sometimes called basic accounts are offered in about 95% of our financial institutions, according to a study by the Consumer Bankers Association. And three quarters of those have no eligibility requirements. They allow limited check writing for low or no monthly fees.
Some have as low as a $25 minimum balance, and the charge on such accounts averages $3.14 a month.
As for cashing of government checks for non-depositors, those financial institutions that do so charge on the average of $2 to $3 service charge for the encashment. The survey run by the Consumer Bankers showed that 72% of banks and thrifts cash checks for people who do not have accounts with them.
Copyright © 1993 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 4, No. 5, 11/93
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