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#804749 - 08/29/07 02:54 PM X-Changing NSF checks for Cashier Checks....
Georgia Golfer Offline
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Georgia Golfer
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Does everybody still do this? I just discovered during a routine audit that one of our branches is charging $5 to exchange a NSF check or any type of check for a cashier check. The problem is that the TIS disclosures only charge $3 for a cashiers check. Not that that's a huge problem, since the cashier check is being issued to a non-customer, which is a bigger concern in my book, since that is a direct violation of bank policy & I'm worried about BSA tracking.

Am I off base here, thinking that it's OK for us to stop doing this? I'm worried about BSA implications and our due dilligence before issuing these types of cashier checks.

I'm concerned, but it could be the 3 cups of coffee messing with my head....

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#804882 - 08/29/07 03:49 PM Re: X-Changing NSF checks for Cashier Checks.... Georgia Golfer
John Burnett Offline
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I don't think your TISA disclosure conflicts with the fee, since the TISA disclosure should only apply if a customer withdraws from an account and requests a check. Even then, it's not a required TISA disclosure item.

I don't think you have significant BSA/AML monitoring concerns, frankly. However, I share you concern that bank policy doesn't permit the practice, yet it's still, er, practiced.

There can be a real problem doing this for payees who are entities.

And your third cup of coffee must have really gotten to you. We took well over 20 copies of your post off the boards.
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#804913 - 08/29/07 04:04 PM Re: X-Changing NSF checks for Cashier Checks.... John Burnett
Georgia Golfer Offline
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Georgia Golfer
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Let me try to respond without ending the world....my concern is that we are issuing cashier checks to non-customers, mainly merchants who bring in NSF checks that our customers have written. to clarify, bank policy is not to sell cashier checks to non-customers, we're not really selling them, we're exchanging them, but I don't like that technicality.

I'm just thinking that wouldn't that be a way to launder money & we're not verifying or checking OFAC or anything in this situation. Just doesn't seem like a best practices to me & was wondering if other banks are still exchanging. There are some banks around here that are requiring signature guarantees from us when our customers take checks to them to exchange, but is that nationwide practice & does that really acomplish anything?

Let's hope this only posts once.....

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#805014 - 08/29/07 04:51 PM Re: X-Changing NSF checks for Cashier Checks.... Georgia Golfer
Jalen Offline
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Sounds like you're treating it as a collection item. You should be checking OFAC and charge a collection fee.
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#805058 - 08/29/07 05:24 PM Re: X-Changing NSF checks for Cashier Checks.... Jalen
John Burnett Offline
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I will agree that not selling cashier's checks to non-customers is a valid risk-mitigation tactic for BSA/AML. I was adamant about getting a similar policy adopted by my former employer. My primary focus was cash transactions at the time.

I imagine a lot of banks have adapted their "no non-customer" rule to allow for the long-standing practice of processing collection items. I think that doing it without an intermediary bank to guarantee endorsements can be risky, though, particularly when the payee is a business.

I second the OFAC check suggestion, if you've analyzed the process for OFAC risk and decide it's right for you to do.
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