Click to return to BOL home page
Banker Store Read A Reg BOL Insiders Career Connect Learning Connect Bankers Information Network

Search BankersOnline
using Google


    Agency Road Maps

    Alphabet Soup

    Compliance Tools





    Lending Tools




    Check 21

    Operations Tools

    SAR Resrch Guide



    Bank Robbery


    ID Fraud/Phishing

    Security Tools


    Info Security

BOL Archives

BOL Blogs

Briefing Archive


Court Watch

e-Card Exchange

Examiner's Corner

Executive Briefing

HR Corner


Launch Pad

Regulator Roadmaps

Risk Management

Site Map

Site Orientation

Top Stories

~ ~ ~

Em@il Education

ID Verification

~ ~ ~

Banker Store

Bankers Info Ntwk


Career Connect

Learning Connect

Guru Central


Ask a Guru
Bankers Threads

Contact Us

Give Us Feedback


60 Second Solutions

Alphabet Soup

Banker Tools

BOL Forms


BOL Recipes

eCard Exchange


About Our Sponsors
About Us

Print Friendly! Email This Article! Discuss NOW!

"Without Recourse" - Ramifications & Restrictions

by John Burnett, BOL Guru
Guru Bio

Question:  Please help me understand the ramifications and restrictions of the following endorsement. A check is presented to a teller for negotiation and the check is payable to Jane Doe and Big Bank, USA. Big Bank, USA stamps the back of the check with "Pay to the order of named Payee without recourse" followed by a signature line for a designated person from the bank to sign (which they have). Exactly what does the "without recourse" statement mean? Is "Big Bank, USA" signing the check over to the payee "without recourse" to them (the payee) or to the negotiating bank, or does the "without recourse" mean that the negotiating bank has no recourse against the business that stamped the check?

Answer:  That form of endorsement is an attempt on the part of Big Bank to indicate that it is releasing its claim to the proceeds of the check, but because it received no value for its endorsement no one should look to Big Bank for a transfer, presentment or other warranty claim. The use of this form of endorsement is common for insurance proceeds checks. Typically, such checks are payable jointly to the insured and to a lienholder or mortgagee. Also typically, if the lienholder or mortgagee is satisfied that its collateral for the loan isn't impaired and the loan is current, the lienholder/mortgagee has no reason to want a piece of the check.

First published on 9/17/07

Privacy Policy    Disclaimer   Recommend This Site !   Contact Us

BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.