Procedure for NSF On-Us Check
by Mary Beth Guard and John Burnett Guru BIOS
Question: If a customer has an on-us check and wants to deposit into their account but the funds are not
good at this time, do we run this through as a transit check (knowing the funds are no good at this time) or
are we just to refuse the customer and stamp the check NSF?
Answer: This is an operational decision that involves the method your bank uses to process checks. In general,
the traditional commercial bank Proof of Deposit (POD) method accepted the deposit with only the cash counted, and endorsements superficially checked.
No attempt is made to verify any of the checks in the deposit. They are looked at only if there’s a problem with them the next day.
Answer: In the “thrift” method, on-us checks are processed separately from the deposit. In this scenario, it’s likely
you would return the check to the customer with some indication it was not payable. The proper method is the method your bank’s procedures call for.
The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.
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