Negotiation Obligation

Posted By: Anonymous

Negotiation Obligation - 12/11/20 09:15 PM

Are we obligated to negotiate a check from one of our customers to a non-customer?

Non-customer received a large settlement; attorney (our customer) cut them a check. Check is for $80,000.00. Non-customer wants cash.

Are we obligated to negotiate this check?

1) Technically, we do have adequate funds to cash. However it would leave us extremely short for the rest of the next week, until we can place a currency order.

2) Could we place a "special order" of currency for this check, and charge the non-customer?

3) Could we negotiate a part of the check, and cut them a Cashier's Check? If so, could create a stipulation that this is a "one-time only" transaction, and the customer would no longer have the ability to negotiate the Cashier's Check?

The non-customer is ADAMANT they get cash.
Posted By: ACBbank

Re: Negotiation Obligation - 12/11/20 09:30 PM

You may want to wait for someone who has more experience than me but we have told non-customers we would not provide them with $25,000 in cash at one time.
Posted By: Complycated

Re: Negotiation Obligation - 12/11/20 09:53 PM

The only check you have to cash is if your customer writes themselves a check on their account at your bank and only then if the funds are available and the customer can be identified. Any other check can be refused.
Posted By: Anonymous

Re: Negotiation Obligation - 12/14/20 05:58 PM

Sure you can refuse.

As a non-customer of a certain global bank that will go unnamed, I have been refused when trying to cash a check drawn on one of their customer's accounts. A dentist wrote me a $300 refund check for an over-payment, and I went next door to cash it at the dentist's bank. "We don't cash checks for non-customers. If you'd like to open an account, please have a seat in the lobby. Otherwise you can take this check and deposit it at YOUR bank," they said, with a smile.

As a non-customer payee of a certain local bank here, I had the same experience. I took a payroll check there once and was told "We don't cash checks for non-customers."

I think it is perfectly reasonable to refuse to cash such a large check. I'd offer a cashier's check, and explain that when he or she takes the check to his or her bank, they can call us to verify the funds are good.

I'd also confidentially refer the payee's insistent demand to your BSA Officer, for a possible SAR (without letting the customer know that part, of course).
Posted By: Anonymous

Re: Negotiation Obligation - 12/15/20 03:02 PM

We have offered the non customer part in cash (whatever the branch could provide that would not leave them short) and the rest in an official check and let them know that they can get the rest if we order it for them.
It's always odd when someone doesn't want to go to their own bank. The tellers will always mention to them to go to their own bank and if their response is they don't have a bank they will offer to open an account.

Another thought...if you refuse to negotiate the check for the non customer, how will your attorney customer react? I know at a small bank where I work, this could be a reputational risk for us, but it's all in how the situation unfolds.