That doesn't sound like there's a new law or regulation. It sounds like the bank in question got wise and won't exchange customer checks payable to the lender for cashier's checks after October 31. Instead, the payday lender will have to deposit the checks and let them clear (which normally is done electronically these days).
Your bank is similarly under no obligation to exchange on-us checks payable to the payday lender for cashier's check on presentment. You risk the possibility that the persons indorsing and negotiating the checks are not acting under authority from the payday lender, which could result down the road in forged indorsement claims, etc.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8