To whom should a Cashier's Check be made payable?
by Ken Golliher, BOL Guru BIO AND CONTACT INFO
QUESTION: When a customer is purchasing a cashier's check, is it best to have the customer make their check payable to the bank or to the person in which the cashier's check will be payable to?
ANSWER: In general, a bank should never accept a check payable to the bank unless it is actually receiving the funds, such as a loan payment or TT&L deposit.
Someone purchasing a cashiers check should make the check payable to himself or to an employee and then endorse it on the back. If they wish, they can use a restrictive endorsement, "Pay to the order of Bank to Purchase Cashiers Check, John Doe."
A recent circular from a bank insuror related a court case where the employee of a CPA firm wrote several checks payable to the bank. On the CPA firm's books, they were recorded as proper payments on a line of credit. In reality, the employee was using the checks to purchase cashiers checks payable to people and entities she controlled. The court found the bank negligent in allowing the employee to purchase the cashiers checks.
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