Reg CC Violation-Items Not Identified As Cashier's

Answered by:

Question:

We have an item from a Canadian Bank that is payable in U.S. funds through an American bank. There is no indication on this item that it is a cashier's check. Stamped verbiage on the back of the item says "DRAFT VOID IF NOT PROTECTOGRAPHED ON FRONT." When we contacted the Canadian bank, we were told the item is a cashier's check. Is there any law or regulation that stipulates items must be identified as a cashier's check so we don't run the risk of a Reg. CC violation?

Answer:

The definition of "cashier's check" goes to who drew the check and who will pay it. There is no regulation on the use of the term. Even a non-bank could, in theory, label its checks that way.

If the check is issued by and signed by a U.S. branch or agency of the Canadian bank, drawn on itself, a direct obligation of the issuing bank and provided to its customer or acquired from the bank for remittance purposes, it's a cashier's check, even if not labeled as such. The key question, I think, is whether it meets the first qualification. If it's issued by the Canadian bank itself (not by a U.S. branch or agency of the bank), it's not a cashier's check under Reg CC, even if the Canadian bank claims it is.

Don't forget that you have the right to require that your customer uses a special deposit ticket (if it's needed to obtain next-day treatment).

I assume you obtained the contact information for the Canadian bank from the internet or other directory source, rather than using a telephone number on the item. Right?

First published on BankersOnline.com 3/18/13