We are presently having a FDIC Safety and Soundness Examination which includeds BSA. They are looking at presently outstanding money orders. There is one outstanding money order over 2 years old. I am writing the customer now asking them to redeem this money order. Can we require this customer to do this? I want to ask the customer to redeem the money order and put this in a certificate of deposit but if they refuse I don't think we can make them redeem the money order.

My question can we do this?

Congratulations you must be doing well for them to bother you with this. How would you know if the customer did not give the M/O to someone else who did not cash it? or the M/O was lost by the customer or the payee. lost by the bank the payee deposited it into or lost at the fed, lost at your bank?

you may be asking them to "redeem' an item they do not have.

You might also want to check your state's escheatment (unclaimed property) regulation to see the time frame as to when you might have to send the funds to the state. In NM, our cashier's check limitation is five (5) years.

Ahh, Memphis Region FDIC, you gotta love 'em. "Yes, Virginia, it really is true that people who do not cash official checks promptly are all money launderers and evade income taxes."

I don't have the time or resources right now to determine whether Mississippi has adopted Section 3-411 of the UCC, but you are going to need to figure it out and then decide what you would require to reissue the check based on the circumstances related by the purchaser. Trust me, how you handle this situation is a lot more important than whether your examiners make some inane reference in your written report of examination.

Just talked to the examiner and they are moving on. They indicated there is not a problem with this. The person who purchased the money order passed away about a year ago. The Money Order was purchased with another money order he purchased 5 years ago and so on. The money order is payable to the person who purchased the money order and who is now deceased.

My question should a SAR be filed? I am saying not since the person who I would file the SAR on is deceased.

SAR- for what reason - even if still alive? There is no law against keeping a money order handy for some unexpected cash needs.

Do what you can to make the personal representative of the decedent's estate aware of the instrument. One of the upsides of buying and holding official checks is that they would be impossible for a third party to locate, but that readily becomes a downside if the owner dies..

RLCarey, I had heard in meetings that a SAR should be filed is a customer puchases a money order and keeps it and sometime later redeems and uses that money order to purchase another for same amount or a different amount. I can't remember where I was told that but I was.

Probably by some misguided examiner. Do you do the same thing when I take $10,000 out of my left pocket and put it into my right pocket? Nobody knows that I have that equivalent of a cash instrument hidden away either.