Third party deposit of federal checks

I remember reading somewhere that a federal or government check cannot be endorsed and passed to a third party. Is that correct? If so, can you tell me the governing reg?

If not, can you please straighten me out on it? Thanks!

Hope everyone is having a Happy New Year!

I'm not certain I understand...

If John receives a Treasury check, he can indeed endorse it over to Mary Beth; he is not obligated to endorse it over to a financial institution. He could also endorse it over to the corner grocery, the bodega, or the check casher using conventional forms of endorsement.

Your recollection might have its origins in the possibility that if Mary Beth came in with a Treasury check payable to John, but you did not see him endorse it, your bank's policy may be that you simply will not accept it. The reason for that might be, as the presenting bank, your bank guarantees that John's endorsement is genuine. If it's not, Treasury will look to you in a reclamation notice and you have no proof whatsoever to offer regarding the authenticity of John's signature. You will have to look to Mary Beth to pick up the item. She's got to be a pretty solid customer for you to be that confident she will come through for you.

That's what I was looking for, Ken. Thanks! I just couldn't explain it correctly.