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#28433 - 08/20/02 02:06 PM Check cashing
jnj Offline
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Joined: Aug 2002
Posts: 3
My bank is a 6 year old Community Bank. As a Community Bank our directors and officers made the decision to cash payroll checks for established businesses in our community. Since the payee is a non-customer and the check is not drawn on our bank we do implement a check-cashing fee. Proper identification procedures are in place.
My question is: Since we are dealing with non-customers what will be the OFAC requirements if we continue this practice?

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General Discussion
#28434 - 08/20/02 02:09 PM Re: Check cashing
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,590
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The requirement would be/is to check it against the OFAC list.
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#28435 - 08/20/02 02:30 PM Re: Check cashing
Sponge Steve Offline
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Sponge Steve
Joined: Jun 2002
Posts: 299
Midwest
Andy's right but in practical terms I would not worry about it. If your local employer has Saddam Hussein on the payroll and Saddam is stupid enough to come to the bank to cash the check then we have problems bigger than whether or not your tellers have the OFAC list at their fingertips as these folks cash their paychecks. Most every individual on the OFAC list (you will be dealing with individuals, not entities) have no known presence in the USA.

Last edited by Steve White; 08/20/02 04:28 PM.
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#28436 - 08/20/02 02:33 PM Re: Check cashing
jnj Offline
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Joined: Aug 2002
Posts: 3
The answer I expected. So, will a fellow banker share with me what their intent is. I know most community banks perform the same check cashing courtsey as this. It will be impossible to check the payee on Friday paydays, this is generally the same employees week after week. Will you just stop cashing all checks (except what is drawn on your bank) for all non-customers.

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#28437 - 08/20/02 04:16 PM Re: Check cashing
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,590
On the Net
You'll have to manage this risk. But I won't logon to a public forum and tell you that there is a requirement you can choose to ignore because it is too much of a problem. Nor would I expect you to do so.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#28438 - 08/20/02 10:46 PM Re: Check cashing
SMQ, CRCM Offline
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Joined: Apr 2001
Posts: 4,828
Between the lines
We stopped cashing checks for non-customers unless the check is drawn on our bank. We also do not sell them money orders, travelers, checks, wire transfers, etc. One of the reasons being OFAC and Patriot Act rules, the other being that we found that we were having to staff up for peak check cashing days as well as ordering extra cash for those days. The first month we notified these people that we would no longer cash checks and encouraged them to open accounts. These have to be real accounts with real activity--not just $20 sitting in a dormant account. The next month, we turned them away. It has only been two months, but it has been wonderful. We now have plenty of tellers everyday to handle our real customers, we do not have to pay as much overtime, we do not have to buy their lunch (nobody had time to go out on certain days) and we are lowering our cash limits which means we have more to invest. Our customers love it because they do not have to wait in long lines. So far, this has been one of the best decisions that we have made this year.
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#28439 - 08/20/02 10:51 PM Re: Check cashing
Tina A Sweet Offline
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Tina A Sweet
Joined: Aug 2001
Posts: 1,033
Marysville, Ca.
Am I understanding the issue here. Are you saying that verification against the OFAC SDN list is required under the new USAPA or under OFAC guidelines. I have not read that as yet. Can someone stear me correctly?

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#28440 - 08/21/02 02:19 AM Re: Check cashing
JacF Offline

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Joined: Nov 2001
Posts: 6,719
PA
My take: USAPA (an acronym of an acronym- gotta love it!) requires checking against government lists when a person opens/applies for a new account. I don't see that check cashing falls into this category. That being said, OFAC rules still apply in that trasactions done for persons on the list must be blocked or rejected, but without the mandate of checking the list on each transacion. That's why it is a risk based decision.

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