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Are there certain checks that we are obligated to cash for non-customers?

Question: 
Are there certain checks that we are obligated to cash for non-customers, i.e., on-us checks, government checks, money orders, etc? If so, do they fall under Reg CC?
Answer: 

Answer by John Burnett:

Ordinarily, you can assume you're obligated to cash only on-us checks for non-customers. There is no obligation to cash government checks or money orders (some states may have a requirement that you cash certain types of government checks, even for non-customers).

Regulation CC only applies to funds availability from checks that have been deposited by your customers. It might affect your obligation to cash an on-us check if drawn on funds that are not yet available. Otherwise, it won't apply to any other checks you might cash.

Answer: 

Answer by Ken Golliher:

John is correct, there is no federal law that requires you to cash any type of check for a noncustomer, including a US Treasury check. Such a law was proposed several years ago, but it did not pass. You cash on-us checks because your contract says you will make payments according to the drawer's order.

As he suggests, take a look at state law. One area to search would be the requirements for state depositaries; e.g., some states require that banks holding state funds cash state issued checks, but they do not prohibit you from requiring identification.

First published on BankersOnline.com 1/20/03

First published on 01/20/2003

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