Definition Of A Cashier's Check
by Mary Beth Guard, BOL Guru
Question: Please help me settle a Reg CC debate on the definition of a "cashier's check". The definition would include more than just those checks that state "cashier's check" on the face of the instrument, correct? How are examiners interpreting this when reviewing Reg CC holds?
Answer: Answer: You must apply a functional definition of the term "cashier's check". Rather than looking to see how the instrument is labeled, determine instead how it works. Under Reg CC, a cashier's check is defined to mean a check that is--
Drawn on a bank;
Signed by an officer or employee of the bank on behalf of the bank as drawer;
A direct obligation of the bank; and
Provided to a customer of the bank or acquired from the bank for remittance purposes.
So, for example, some items labeled "money orders" are, in fact, really cashier's checks if they are drawn by the bank on the bank, signed by an officer or employee of the bank.
The original version appeared in the March 2003 edition of the Oklahoma Bankers Association Compliance Informer.
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