Thread Options
#589912 - 07/28/06 02:02 PM Cashing Checks Payable to Bank
Bagweaver Offline
Diamond Poster
Joined: Nov 2005
Posts: 2,409
SW GA
If a customer intends to cash a check drawn on his account with our bank and makes the check payable to the bank, what kind of problem would there be if the teller cashes the check? Should the customer endorse the check if it is OK to cash the check?
_________________________
Semiretired. Working parttime at Historic Westville as a tour guide.

Return to Top
Deposits and Payments
#589913 - 07/28/06 03:28 PM Re: Cashing Checks Payable to Bank
TDM Offline
Member
Joined: Nov 2005
Posts: 82
It's just a good bookkeeping practice, for one thing. Checks made payable to your bank should be a transaction between the bank and its customer... like a loan payment.

If the customer wants to withdraw cash from their account, they are essentially doing business with themself... not with the bank. Therefore, the check should be payable to self and indorsed by self. It's a much better record when done this way.

Return to Top
#589914 - 07/28/06 03:34 PM Re: Cashing Checks Payable to Bank
TDM Offline
Member
Joined: Nov 2005
Posts: 82
Here's a link you may want to check out, too:

http://www.bankersonline.com/operations/gurus_op051203d.html

Return to Top
#589915 - 07/29/06 11:57 AM Re: Cashing Checks Payable to Bank
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Sometimes it is essential to retrain bank employees. Sometimes it is essential to retrain customers. As noted, banks should not accept checks payable to the bank unless the bank is receiving the money; e.g. a loan payment. Accepting an item payable to the bank for cash or deposit opens the door to a number of ways to defraud the bank or its customer.

The teller should always draw the error to the customer's attention. If the bank chooses to continue with the transaction (big IF), it should require the customer to sign the check on the back, "Presented for cash at XYZ bank, John Doe." That is less of an endorsement and more of a memorandum. It puts a band-aid on the problem without fixing the problem.

Again, the customer needs to be retrained...
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#589916 - 07/29/06 02:24 PM Re: Cashing Checks Payable to Bank
Bagweaver Offline
Diamond Poster
Joined: Nov 2005
Posts: 2,409
SW GA
Thanks, everyone. That's what I'd thought, but another employee (not the teller) thought that it was OK.
_________________________
Semiretired. Working parttime at Historic Westville as a tour guide.

Return to Top
#589917 - 08/01/06 06:21 PM Re: Cashing Checks Payable to Bank
Jerseygirl Offline
Platinum Poster
Joined: Apr 2005
Posts: 684
Jersey Shore
I learned something new today. At the beginning of my banking career - I was told if I was going to cash a check I should never make a check payable to cash but payable to the bank. The explanation was that if it was loss it couldn't be cashed.

Return to Top

Moderator:  John Burnett