How long do you have to return a check for missing one of the required endorcements? We cashed a check that was made out to our customer and vendor. The vendor never signed it and we still processed it and now months later the paying bank wants to return the check? How long do they have??

Look at Reg CC, 229.31. The returning bank must meet the two-day/four-day test. I believe "months later" is too late. Unless someone knows of other rules that may apply...

Under the UCC a depository bank can be presented with a breach of endorsement warranty claim for up to 3 years after the deposit of the check. Under Section 3420 your institution's liability is limited to the interest that the vendor had in the check. Any payments made by your customer to the vendor would reduce your bank's potential liability. You should consult with your attorney to determine what defenses, if any, your institution may have to the warranty claim.