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#1591863 - 08/15/11 02:11 PM CTR-Customer & Lien Holder-Hail Damage
MoodyBlue Offline
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Joined: Jul 2006
Posts: 183
Below the Mason Dixon Line
How is everyone handling this scenario. Insurance check payable to customer & lien holder that is CTR reportable. The customer is the one actually receiving the cash but since the check is payable to both---do both need to be reported in Part I Section A?? If so, poses a problem as the lien holder is out of town/state.

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#1591877 - 08/15/11 02:24 PM Re: CTR-Customer & Lien Holder-Hail Damage MoodyBlue
John Burnett Offline
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John Burnett
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Cape Cod
The lienholder is included as a payee to ensure that the lienholder knows of the insured loss and is satisfied that its security interest is not impaired by the loss. So, for example, if the loan is in arrears or if the property needed extensive repairs and the lienholder needed to maintain control over the insurance proceeds to ensure that the repairs are completed, then, the lienholder can refuse to endorse and surrender the check to the borrower.

If the lienholder has endorsed the check and the borrower now has control of the proceeds, the cashing of the check won't benefit the lienholder at all, so the lienholder would not be listed on the CTR, IMHO.
Last edited by John Burnett; 08/15/11 02:24 PM.
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#1591906 - 08/15/11 03:15 PM Re: CTR-Customer & Lien Holder-Hail Damage John Burnett
MoodyBlue Offline
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In the case of the CTR reportable transaction---the teller cashed the check with only the customer's endorsement and the check will probably be returned as missing endorsement.

There have been several of these insurance checks returned to us that do not have the lien holders endorsement.

Tellers have been told to take these checks if the lienholder has endorsed as "without recourse or representation"

How would the bank know if the lienholder has refused to endorse these checks?

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#1592117 - 08/15/11 07:51 PM Re: CTR-Customer & Lien Holder-Hail Damage MoodyBlue
John Burnett Offline
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John Burnett
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Cape Cod
"There have been several of these insurance checks returned ...."

Someone in your organization needs to take ownership of this problem and get tellers trained on checking for the required endorsements. I know that this year there have been a lot of insurance claims, but when you see a pattern of problems, there's more than one teller that needs retraining. The bank that takes losses and doesn't connect the dots to see that retraining is needed won't stop the problem.

"How would the bank know if the lienholder has refused to endorse these checks?"

For starters, if the lienholder hasn't endorsed them, it won't matter whether the lienholder refused to endorse them or not. The fact is, they aren't endorsed, and your tellers shouldn't be cashing them or accepting them for deposit.
Last edited by John Burnett; 08/15/11 07:52 PM.
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#1592157 - 08/15/11 08:35 PM Re: CTR-Customer & Lien Holder-Hail Damage John Burnett
MoodyBlue Offline
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Joined: Jul 2006
Posts: 183
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My CTR has been reported as listing customer in Part I Section A ------from my original post.

As far as returned checks with missing endorsements--I found out about those today from the CO because of this CTR and the check involved that I questioned.

I was advised that Teller Trainer initiated training a month or so ago when these checks started coming into the bank. From my post above-----
Tellers have been told to take these checks if the lienholder has endorsed as "without recourse or representation"

This statement in your first post is what confused me----the lienholder can refuse to endorse and surrender the check to the borrower.

I advised that tellers be retrained. Also, customers will have to be advised that these checks have to be endorsed by lien holder, evidently they don't know.

Thank you!!

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#1592160 - 08/15/11 08:36 PM Re: CTR-Customer & Lien Holder-Hail Damage John Burnett
MoodyBlue Offline
100 Club
Joined: Jul 2006
Posts: 183
Below the Mason Dixon Line
My CTR has been reported as listing customer in Part I Section A ------from my original post.

As far as returned checks with missing endorsements--I found out about those today from the CO because of this CTR and the check involved that I questioned.

I was advised that Teller Trainer initiated training a month or so ago when these checks started coming into the bank. From my post above-----
Tellers have been told to take these checks if the lienholder has endorsed as "without recourse or representation"

This statement in your first post is what confused me----the lienholder can refuse to endorse and surrender the check to the borrower.

I advised that tellers be retrained. Also, customers will have to be advised that these checks have to be endorsed by lien holder, evidently they don't know.

Thank you!!

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