We are trying to shore up all of the OFAC holes within our operations. If a non-customer comes in to cash an on-us check, should we be checking them on OFAC? If so, how are banks accomplishing this? Also, what if they were on the list? Aren't we still obligated to cash the on-us check? Also, when a customer purchases a cashier's check (we don't sell to non-customers), should we be checking the person to whom the check is made payable? How are banks accomplishing this?

I'm having one of *those* days, so take everything I say con granu salis.

1. Non-customer cashing an on-us check. Yes, you should be checking them on OFAC. Banks use a variety of means to do this; internet access to an OFAC checking service, online applications, and so on.
2. What if they are on the list? Then you may not hand them money. How you accomplish that should be spelled out in your policies and procedures. The Executive Order trumps your obligation, although putting the money in an escrow account neatly accomplishes both goals. What to tell the non-customer? Well, I know what you *can't* tell them. You might simply say that there's been a hold placed on the check, and the system isn't telling you why.....
3. Checking the payee on the cashier's check...Yes, I suppose that's safest.