Official Checks - 3rd Party Online Bill Pay

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Question:

Would checks issued by third-party online bill payment service providers be consider "official checks" under Reg CC for the purpose of assigning float? We have such a check that we assigned our non-local 2-day float to because even though the financial institution is local, the issuer (third-party bill payer) is not. The routing number on the check is non-local for us. Our customer is wondering why we didn't provide next-day availability because the words "Official Check" appeared on the item. I would say that this check does not meet the definition of either a cashier's or teller check. Am I correct?

Answer:

The term "official check" officially means nothing. It's not a defined term in either the Uniform Commercial Code or Reg CC. If the check is drawn by (signed by) a third-party non-bank bill-payment company, it's neither a cashier's check nor a teller's check. The definitions of each of those "next-day" items requires that the check be drawn by a bank. You appear to have handled the check properly.

First published on BankersOnline.com 9/24/07