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Cashing Checks for Business Acct. Employees

Question: 
What compliance risk is there associated with one of our business deposit account customers asking us to cash checks for their employees? The employees do NOT bank with us AND the payroll account is drawn on an outside bank. I am worried about the CDD and the BSA aspects of engaging in this type of activity. Any thoughts?
Answer: 

by Ken Golliher:

"Compliance" risk? None. CIP and CDD apply to opening and maintaining bank accounts, not check cashing.

However, your use of capitalization suggests you are well aware that it's a business decision that should be justified from a business standpoint. It's going to require you to train your tellers that "We do not cash foreign checks for non customers UNLESS they are drawn on ABC, Mfg., then we do."

To summarize what would otherwise be a couple hundred words, I would not do it unless I was handsomely compensated for doing it.

Answer: 

by John Burnett:

I also suggest that, even if handsomely compensated, you would require that any employee who wants to cash a paycheck have an employee ID, preferably with photo and signature, and a driver's license or state-issued ID card, definitely with mug shot and signature.

First published on 10/29/2017

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