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#702551 - 03/16/07 08:07 PM Cash Chk for OD Customer (Drawn on Other Cust)
Theresa M Offline
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Theresa M
Joined: Mar 2007
Posts: 21
If a customer is currently overdrawn, but brings in a check made payable to them from another customer (with available funds), can we require that he/she deposit the check and bring account current before cashing? Since the funds are available in the drawers account, I'm not sure if we are allowed to refuse.

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#702568 - 03/16/07 08:21 PM Re: Cash Chk for OD Customer (Drawn on Other Cust) Theresa M
Gita Offline
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Joined: Dec 2006
Posts: 19
No. You have to cash your own checks. What you can do is charge them a fee just as you would a non-customer, if that is in your banks policy or operations manual.

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#702662 - 03/17/07 12:25 PM Re: Cash Chk for OD Customer (Drawn on Other Cust) Gita
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
"You have to cash your own checks. "

Were does it say that in this situation?
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#702720 - 03/18/07 09:35 PM Re: Cash Chk for OD Customer (Drawn on Other Cust) rlcarey
SD_Girl Offline
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SD_Girl
Joined: Apr 2004
Posts: 54
Happiest place on Earth, CA
It is our bank's policy that you can cash it, but the customer must bring their account current with the funds. Any extra funds, the customer my walk out the door with, just as you might do with any other check. The fact that the check is drawn on your institution only provides you with the knowledge that the check is good to go. No worries on returns (well, for the most part). That customer is responsible to keep their account current with your banking policies.
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#702721 - 03/18/07 10:02 PM Re: Cash Chk for OD Customer (Drawn on Other Cust) SD_Girl
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Ditto SD_Girl here too
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#702724 - 03/19/07 03:16 AM Re: Cash Chk for OD Customer (Drawn on Other Cust) Theresa M
RayLynch Offline
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RayLynch
Joined: Oct 2003
Posts: 544
You should check your Deposit Account Disclosure Agreement to see if your situation is covered (i.e., some statement that provides the customer agrees that if their account is overdrawn subsequent deposits & credits may be used to satisfy an overdraft as well as checks the customer seeks to cash that are made payable to the customer). If not, you should think about revising your Disclosure Agreement so in the future a client is contractually obligated to let you keep funds from any check they seek to cash up to the amount of the overdraft.

You should also check your state's law on banker's liens and setoff. If your state law provides that a bank has a lien on any client's property in its possession to cover a debt owed by the client to the bank, then the banker's lien may attach to the check (and its proceeds) as soon as the customer gives it to you. You should consult with your bank counsel on this point.

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