Non customer requests that we exchange a check given to him by a customer for Bank cashier's check. The customer account has sufficient funds and there is no stop payment on the check. The check is dated by the customer for the prior day.
Obviously we CAN issue a cashier's check, BUT should we? There was a thread at one time with the pitfalls that concluded with...if you have not done it before, why start now. I agree but .....

I smell a problem. There's likely some dispute between the two of them that the noncustomer thinks he's dodging by converting the funds into a cashiers check at your bank.

His options are to present the item for payment in cash under your rules the same as any other over the counter item - - and hopefully you are not selling cashiers checks to noncustomers for cash. Or he can deposit it into his account at his bank and get a cashiers check there.

If the customer's check is payable to an individual and that individual asks to have it paid in the form of a cashier's check rather than in cash, what is the problem? You're being asked to make final payment on it regardless of which way it's done. Your customer and the bank will be in the same position either way -- the customer's check is paid and the bank has either paid out the cash or liable to pay its cashier's check when it's later presented.

If the customer's check is payable to an entity, that's a horse of a different color. In that case, you have a legitimate concern about the authority of an individual to present the check for negotiation on behalf of the entity.

This is a common practice, particularly if non customer sold your customer something, and non-customer's bank is talking about placing a hold - our practice has always been to process, however, we do charge our cashier's check processing fee. I won't do it for free.

Good responses already. Assuming the payee is an individual:

First, you are not required to do it. If the payee on your customer's check wanted a cashiers check, he should have demanded a cashiers check from your customer.

Second, make certain any prohibition you have in a BSA policy about selling checks to non customers indicates that it applies to "cash" sales. There is no BSA reason for refusing to accept a properly endorsed on-us check in payment for a cashiers check.

Third, if you choose to do it, you are not required to do it for free; charge your normal fee.

Fourth, if the payee is not the individual standing on the opposite side of the counter forget all of the above. This is a mechanism that some banker dreamed up when banks stopped certifiying checks. The UCC does not bless it. It is not the equivalent of certifying a check and it's a ridiculous move if the check is payable to an entity.

Reviving this old post. . . We have a $100K check payable to Mickey Mouse (Non-customer) on Donald Duck's checking account. We do not offer this much cash so we offer a cashiers check (after verifying endorsement signatures, ID, etc.).

If we had provided cash it would require a CTR. Providing a cashier's check does not. It seems to me that one SHOULD be done as this would be an easy way to avoid a CTR. Thoughts?

Also, in my opinion, the cashier's check would be from the BANK (not Mickey or Donald). Similar to a bank sending a check by way of draft/collection.Thoughts?

we don't provide cashier's checks to non-customers. He can make arrangements to come cash the check at a future date when the branch will have sufficient funds on hand, he can open an account and deposit it with us, or he can negotiate at his bank. we would not exchange for a cashier's check.

If there is no cash involved, there is no CTR. Period. Full stop.