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Endorsing government check over to a third party
by John Burnett, BOL Guru
Guru BIOS
Question: When receiving a check from the federal government,such as the refund checks due to the increase in the 2003 child tax credit, is it legally possible to endorse the check over to a fiinancial institution for payment on a home equity line of credit? Or must one strictly cash or deposit the federal gov't check directly into a checking or savings account?
Answer: There is nothing in federal regulations or the UCC that would limit one's ability to negotiate a federal government check, including an advance credit (let's please not call these refunds -- they're advance payments of credits available to some taxpayers beginning with tax year 2003) to anyone else for any legal purpose.
I see no reason that such a check, assuming it is endorsed by all payees, could not be restrictively endorsed for application to a line of credit.
First published on BankersOnline.com 10/20/03
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