I realize that this question may be state-specific but figure that it might also be treated similarly in many states. If a customer on whom we've received notice of a child support levy comes in to cash an on-us check, how are we supposed to handle it? Can we just cash the check and ignore the levy since the funds were not deposited? Can we cash the check and withold some of the funds towards the levy (assuming the levy is less than the amount of the check)? Can we refuse to cash the check if the customer refuses to funds to the levy amount without concern about being in violation of UCC for wrongful dishonor? Should this matter be referred to an attorney? There are several different ideas floating around our institution, with the latest being that UCC trumps the levy. Thanks for any guidance.

A levy only legally attaches available funds in their deposit account. Any such action by the bank to seize additional funds will place the bank in jeopardy of being sued.

I would:

1. Close all accounts.
2. Make sure you have a policy not to cash checks for non-customers or charge a hefty fee.

That way it sends the deadbeat down the road and gets them out of your hair, because if all you are doing is cashing checks for them you are losing money.