On Saturday, we are on Monday's business date. Do you cash checks dated on Monday? For example, a pay check?

We do. We'll even cash them Friday night after Cut off.

Nope. We won't cash a check until the date on the check is the same as the date on the calendar.

I wouldn't. What are you going to do if a customer wants to place a stop payment on it but its already been paid prior to the date on the check? Thats not a discussion I'd want to have.

Payment of a check before its due date is permitted under the UCC unless the issuing customer contacts the bank to report the postdating and requests that it not be paid. While I agree that many bank customers aren't aware of that fact, it remains a fact.

John, doesn't such a payment have to have been "in good faith?" The way I was taught is that if it clears through the fed or is in a deposit then we paid in good faith. If it is cashed by a teller though the teller should have seen the date and refused to pay. Have we been misinterpreting this?

You know, I found a copy of the Colorado UCC that has the Official Commentary included, and there is that mention of "good faith."

Although I think the plain language of the UCC gives a bank the OK to pay a postdated check if the customer hasn't asked the bank not to, I would not want to get involved in a court discussion of whether doing so met the definition of "good faith." Unfortunately, a lot of times postdating is an error (particularly with payroll services, I've found) and the issuer actually wants checks paid. Other times, the customer still thinks the law makes a postdated check "not properly payable" (that's where I think the revised UCC wording gives the bank an escape hatch).

A best practice, then, probably ought to call for a teller to refuse payment if he or she notes a check is postdated unless there are extenuating circumstances (notice from the customer that it's OK to pay?). If the teller doesn't notice the date, the bank should still be OK under the law, in my opinion.

One type of check that ought to be handled carefully -- any payment that appears to be an annuity payment from a life insurance company. Those folks get their knickers in a knot if it turns out that the payee dies before the date of the check (and the checks are almost always sent out a few days early). A strong argument for direct deposit!