Skip to content
BOL Conferences
Thread Options
#724700 - 05/01/07 03:04 PM Official Checks vs Cashiers Checks
Anonymous
Unregistered

I was always under the impression that 'cashiers checks' and 'official checks' are the same thing, just different names. Now I am being told that a cashiers check and an official check have different rules for stop payments and holder in due course. Does anyone know where I can find the definitions of these two items and what the 'rules' are for stop payments?

Return to Top
Deposits and Payments
#724746 - 05/01/07 03:41 PM Re: Official Checks vs Cashiers Checks
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
As far as I know, they are the same. I would ask whomever told you this to point out the rules differentiating between the two.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#724793 - 05/01/07 04:09 PM Re: Official Checks vs Cashiers Checks RR Joker
Midwest Banker Offline
Gold Star
Joined: Nov 2004
Posts: 349
Cheeseland
While there is no legal definition of "official" checks, there are various definitions which may be helpful, primarily cashier's checks, teller checks and money orders.

Cashier's checks: a draft with respect to which the drawer and drawee are hte same bank or branches of the same bank.

Teller's check: a check drawn by one bank on another bank.

Money order: understood to mean a remittance document that can be purchased from a variety of sources (banks, c-stores, etc). Banks can sell either bank money orders or personal money orders. A bank money order may meet the definition of either a cashier's check or teller's check if they are sold in completed form.

Your best source, in addition to any state regulations is the Uniform Commercial Code (UCC) section 3

Return to Top
#724839 - 05/01/07 04:40 PM Re: Official Checks vs Cashiers Checks Midwest Banker
Anonymous
Unregistered

This is coming from our new auditor. Apparently, at a former bank he worked for, they issued an 'official check' for the purchase of a car. He got the car and then changed his mind and the dealer wouldn't take the car back and give him his money so he came to the bank to get a stop payment on the official item (it had not payed at the time they took the stop pay). The dealer then sued the bank as a holder in due course and the bank won. The court said that purchaser had the right to stop pay on an official item and that the official item did not carry the same warranties as a cashiers check or teller check. This tells me that legally an 'official item' is more like a money order than a tellers check or cashiers check.

I've just not been able to find anywhere that says an official item is more like a money order than a tellers check/cashers check. I was under the impression that an Official Check name had basically replaced tellers check as the name of the item but that official checks were basically the same as a tellers check.

Thanks for your responses. If anyone else has further info please reply.

Return to Top
#725766 - 05/02/07 07:46 PM Re: Official Checks vs Cashiers Checks
Patton Offline
Member
Joined: Aug 2005
Posts: 96
Texas
Not that familiar with it, but try the UCC.

Return to Top
#725820 - 05/02/07 08:53 PM Re: Official Checks vs Cashiers Checks
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
Midwest Banker has provided you a good starting point. Since "official" check is not defined anywhere, and is often used to describe bank checks of various flavors, you need to look at how the item is drawn/issued to find the correct UCC term for the item, and then treat it accordingly.

Return to Top
#725872 - 05/02/07 11:26 PM Re: Official Checks vs Cashiers Checks
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Your new auditor is wrong. The problems with relying on a single trial court decision are that 1) the judge may have been wrong and 2) there is no publicly available record of the judge's analysis, the decision may have turned on a completely different issue.

As has been said repeatedly, the the term "official check" has no real meaning. If it is drawn on a bank and signed by a that bank's employee it's a cashiers check even if it says "Three Pound Pig" across the top of it.

From the Georgia version of the UCC:

(g) "Cashier's check" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.

From the same source:

ยง 11-3-411. Refusal to pay cashier's checks, teller's checks, and certified checks


(a) In this Code section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer.

(b) If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check; (ii) stops payment of a teller's check; or (iii) refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.
_________________________
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
#727368 - 05/07/07 12:50 PM Re: Official Checks vs Cashiers Checks Elwood P. Dowd
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,027
We have an "Official Check" drawn on ABC Bank but the check shows it was "Issued by 123 Payment Systems, XYZ Bank". For purposes of Reg. CC what type of check is this????

Return to Top
#727377 - 05/07/07 01:15 PM Re: Official Checks vs Cashiers Checks HR Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
XYZ Bank has contracted with 123 Payment Systems to issue its official checks. These checks are drawn by XYZ and payable thru ABC Bank. They are Teller's Checks.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#727384 - 05/07/07 01:32 PM Re: Official Checks vs Cashiers Checks John Burnett
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,027
These are so confusing!!! Above the signature line it says Drawer: ABC Bank. The routing number belongs to XYZ. So if ABC is paying their checks through XYZ it meets the definition of tellers check and is therefore a next day available item. Am I correct???

Return to Top
#727412 - 05/07/07 02:15 PM Re: Official Checks vs Cashiers Checks HR Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Sorry. I got the players reversed. ABC Bank issues its official checks using a third party, and they are drawn on that third party's account at XYZ. Yes, it meats the Regulation CC definition of teller's check:
Quote:
Teller's check means a check provided to a customer of a bank or acquired from a bank for remittance purposes, that is drawn by the bank, and drawn on another bank or payable through or at a bank.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#727416 - 05/07/07 02:16 PM Re: Official Checks vs Cashiers Checks John Burnett
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,027
Thanks for the help.

Return to Top
#727425 - 05/07/07 02:28 PM Re: Official Checks vs Cashiers Checks HR Banker
Anonymous
Unregistered

Thanks to everyone for their opinions. John, I agree with you. Doesn't matter what you call it.

Return to Top

Moderator:  John Burnett