Question & Answer

Question: I have been using the articles in Bankers' Hotline on forgeries in our teller training classes, but I have a question that wasn't covered in the articles.

We have always taught our tellers that no matter what paper the check is printed on, the Uniform Commercial Code requires five things need to be present for negotiability: the date, a payee, an amount, the payee bank, and the maker's signature. That last requirement is where we have the problem-the maker's signature.

We have been presented with numerous checks from corporations and even other financial institution's special "Checkfree" accounts which do not bear any maker's signature. They are either typed or computer printed, but do not have even a facsimile signature. Some have printed above the typed signature, "Valid check-Please cash or deposit-Signature on File." Has the UCC changed? We teach our tellers to verify signatures, and then find that other institutions allow customers to utilize checks with no signatures required.

Answer: We had to go to the attorneys for this one! They referred us to UCC 13-3401..."A signature is made by use of any name, including any trade or assumed name, upon an instrument, or by any word or mark used in lieu of a written signature." The Code goes on to say that a signature may be handwritten, typed, printed or made in any other manner. It need not be subscribed, and may appear in the body of the instrument, as in the case of "I, John Doe, promise to pay..." without any other signature.It may be made by mark, or even by thumbprint. But, we are cautioned, a printed corporation's name is not by itself a valid signature if there are lines under the printed name to accommodate manual signatures.

The conclusion is, the signature does not have to be manual. It is up to the arrangements of the customer with the institution as to what will be recognized as the 'signature' on the account. It was not as difficult to determine a 'signature' on a check before we had so many automated systems.If the amount of the check is large enough to worry about, and your disclosure allows it, you might want to put an exception hold on the deposit, using the "Reasonable Cause to Doubt Collectibility", because there is no discernible signature on the item. Be sure and give your customer written notice, and hold the record for exception for two years. Best to check with your attorney before taking any action, though.

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 12, 12/90