Answer:
John Burnett
The word "indorsement" appears several times in Regulation CC and its Official Interpretations, none of them in connection with placing holds on deposited checks.
The word "endorsement," on the other hand, appears only twice, and one instance is on model form C-13, used for exception hold notices. As one of several options in a checkoff list, we see "We are unable to verify the endorsement of a joint payee."
Although you aren't asking about a joint payee, you are asking about a payee's endorsement, and it appears from the sample form that an inability to verify a prior holder's endorsement would be sufficient reason to place an exception hold.
Answer:
Brian Crow
When accepting such a check for deposit, keep in mind that your state's Uniform Commercial Code may allow up to three years for a payee to claim that their endorsement was forged which could result in a loss if you cannot collect from your customer. A 7-day Reg CC exception hold is not going to protect you from a claim several months or years down the road. If you are that concerned about the endorsement of a check, you may want to consider not accepting the deposit until you have verified the endorsement or are willing to accept the risk that your customer will have the funds in three years to cover a claim.
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