Reissuing Cashier's Check: Suspicious Activity?

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Question:

Are there any rules that would prevent us from reissuing a cashier's check every few months for a customer? She comes in and wants a fresh check but never cashes it out. Is that a reportable suspicious activity? Are we breaking rules by doing this?

Answer:

by Randy Carey:

No rules are broken and each situation would have to be examined to determine whether it was suspicious or not. Most banks just don't allow it. They can cash the check or deposit the check. There is no requirement that you re-issue.

Answer:

by Ken Golliher:

Some examiners (short on logic and long on imagination) consider this to be automatic evidence of money laundering or income tax evasion and, depending on the amounts involved, may demand a SAR filing. They do not cite rules, only personal opinions that have taken on a life of their own in some regions.

As suggested, your bank can prohibit the use of a cashiers check to purchase a cashiers check; i.e. the payee needs to cash it or deposit it.

Answer:

by John Burnett:

I have no disagreement with either Randy or Ken, just an observation. Your "customer" may be rolling these cashier's checks over periodically because of a misguided belief that they can be "stale dated." Of course, cashier's checks are not subject to the "stale date" provision of UCC 4-404.