The Endorsement Area On A Check

Question: I'm curious about the 1? inch endorsement area on the back of a check - you know - where it says "Do Not Write, Stamp, Or Sign Below This Line." I understand this was a big situation back a few years, but I thought I read something that this is no longer used and is not part of Reg CC any longer. Is it possible for you to verify this?

Answer: When Reg CC was first proposed, Fed came out with the requirements that all of the endorsement of the bank - date, nine digit, number, etc., had to be wholly contained in the area three (3) inches from the leading edge of the check, and no less than 1.5 inches from the trailing edge. (The leading edge is defined as the right side of the check looking at it from the front. The trailing edge is the left side of the check looking at it from the front.)

Under this requirement, the payee's endorsement could only take up 1? inches. The rest of the check had to be left for all the other information.

That was the proposal.

The check printer companies, assuming no one would argue with the Fed, immediately began to retool - placing on the back of the check the instructions, "Do Not Write Below This Line"?per the Federal Reserve System.

The retail industry went ballistic. Congress itself received more than 10,000 complaints that retailers needed the area on the back of the check to write identifying information when accepting checks.

So Congress notified Fed? "Change the requirement", which Fed did. Now the instructions are still that the bank's endorsement must be within the area, but the requirement for the customer's endorsement has been removed. In the commentary, Fed covered itself by saying, "As long as the endorsing bank's information can be read?" the customer can write anywhere they want on the check. If the customer writes or endorses large or dark enough so that the bank's endorsement cannot be read, it is the liability of the depositary bank, having accepted it that way, if the return is late.

By the end of the comment period when the changed reg became final the check printing companies had their machinery in place, and weren't about to change it again. Hence, the line "Do not write?" is still in place, even though it is not part of the regulation.

You'll find all this in Fed's commentary on Reg CC from 1988.

Copyright © 2000 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 10, No. 12, 12/00