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#1481633 - 12/16/10 11:26 AM Certified checks
mac27 Offline
New Poster

Registered: 01/07/09
Posts: 11
Loc: NH
We offer certified checks for customers to guarantee their own checks. (I am not referring to official checks/treasurers checks) We still use the traditional approach - we withdraw the funds from the customer's checking account, stamp the check as certified and sign it, deposit the funds in a seperate account, and punch holes in the micr line over the customers checking account number. This is primarily requested for mortgage closings to gurantee the funds at closing.

Recently we have had a couple of attorneys/mortgage closers challenge our process stating that some banks will no longer accept the certified checks if the holes are punched in the micr line as the checks do not go through their scanners.

Is anyone else having a problem with this - and do you have a different process for certifying customer's checks?

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Deposits and Payments
#1481641 - 12/16/10 11:36 AM Re: Certified checks [Re: mac27]
Doug Hendrickson Online
Power Poster

Registered: 10/01/09
Posts: 3487
Loc: NE New Mexico
We would issue a Cashier's Checks. We do not perform any sort of 'certification' of a customer's check anymore.
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#1481644 - 12/16/10 11:40 AM Re: Certified checks [Re: Doug Hendrickson]
califgirl Offline
Diamond Poster

Registered: 03/04/02
Posts: 2307
Loc: The O.C., California
We would issue a cashier's check or do a wire.

I didn't know anyone still used certified checks. I haven't seen one in at least 30 years.
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#1481680 - 12/16/10 12:16 PM Re: Certified checks [Re: califgirl]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 52098
Loc: Galveston, TX
I concur... Offering a product that is antiquated and no longer widely acceptable is not doing your customer any real service.
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#1481690 - 12/16/10 12:23 PM Re: Certified checks [Re: califgirl]
madukes Offline
Diamond Poster

Registered: 07/17/09
Posts: 1197
Loc: Flyers Country
We do not offer certified checks. I have however seen them with magnetic strips covering the micr line to reroute the check to another account (certified check account).
Originally Posted By: califgirl
We would issue a cashier's check or do a wire.

I didn't know anyone still used certified checks. I haven't seen one in at least 30 years.


Still used in Canada - I just had a certified canadian check earlier this week.

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#1482163 - 12/17/10 09:37 AM Re: Certified checks [Re: madukes]
mac27 Offline
New Poster

Registered: 01/07/09
Posts: 11
Loc: NH
Thank you all. Yes this does seem to be a service that is rarely used but we do have a few customers who are dealing with companies that insist on these. I do agree we need to look at this service to see what we do going forward. Thank you all for your thoughts and suggestions!!!

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#1482179 - 12/17/10 09:49 AM Re: Certified checks [Re: mac27]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17846
Loc: Another trip around the sun
I think the direct answer to your question is that you will not find many other banks with this problem because so few banks still certify checks. Your brief explanation includes more information than most bankers know about the process.
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#1482183 - 12/17/10 09:57 AM Re: Certified checks [Re: Ken_Pegasus]
Doug Hendrickson Online
Power Poster

Registered: 10/01/09
Posts: 3487
Loc: NE New Mexico
Most of my tellers did not even know what a 'certified' check was...I guess I'm showing my age.
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#1482204 - 12/17/10 10:18 AM Re: Certified checks [Re: Doug Hendrickson]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 31458
Loc: Cape Cod
No, Doug. They are showing their youth.
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#1482211 - 12/17/10 10:23 AM Re: Certified checks [Re: Doug Hendrickson]
Zoo Mama Offline
100 Club

Registered: 03/12/08
Posts: 172
I heard a teller arguing with a customer one day that a certified check was really a cashier's check. They had no idea what the term meant. I also stopped a teller from refusing one for deposit from a car dealership. I think in the last ten years I have done one and am surprised that you still have customers asking for them.

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#1997331 - 02/20/15 01:02 PM Re: Certified checks [Re: mac27]
bcompliance Online
Junior Member

Registered: 09/04/14
Posts: 48
Are certified checks considered a monetary instrument, therefore being included in a monetary instrument log?

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#1997339 - 02/20/15 01:09 PM Re: Certified checks [Re: bcompliance]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17846
Loc: Another trip around the sun
Either way, banks do not sell certified checks for cash; in the absence of a cash purchase, there would be no BSA record retention requirement.

One of the better definitions I found of a "certified check" follows. The key thing to understand is that the item starts out life as a check written by the customer, not the bank.

Certified Checks
A certified check is the written acceptance for a specific check (essentially an acknowledgment), by the Bank, that the Bank's Customer's signature on that check (1) is genuine and (2) there are sufficient funds in the Customer's account to honor the check when it is properly presented for payment. The check is signed by both the Customer and the Bank.

[Abridged]
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#1997371 - 02/20/15 02:31 PM Re: Certified checks [Re: mac27]
bcompliance Online
Junior Member

Registered: 09/04/14
Posts: 48
Thank you for your quick response Ken. I appreciate it.

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#1997454 - 02/21/15 10:03 AM Re: Certified checks [Re: mac27]
mlindblom Online
Junior Member

Registered: 12/09/14
Posts: 40
Loc: New England
One of the local auto auctions would only accept certified checks and nothing else. We had one customer who would request them for that reason... We would stamp and sign the face of the customer's check and hold the funds in our Core until the check cleared. I think the auction finally got with the times as I haven't cleared a certified check since our last Core conversion many years ago. I don't think that function is even enabled on our current processor.

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#1997685 - 02/23/15 04:47 PM Re: Certified checks [Re: mac27]
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1888
Loc: NYC
In the "old days" when certifying a check already written by the account-holder, as Ken indicated, we would debit the customer's account and credit the funds to a suspense account, and then punch-out the customer's account number so the check could not be debited to the account when it was physically presented. I am not sure how this would be done now that checks are presented electronically.

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