Question & Answer

Question: I'm using articles from the HOTLINE for our in-house publication, and I used one on the Uniform Commercial Code where you said that in order to be negotiable a check had to have a date, an amount certain, a signature, a payee and a bank name and address. I've gotten calls from some of my tellers who say their teacher says a check does not have to have a bank name and address. Could you clarify, please?

Answer: You've got some tellers who not only read your bulletins, they pay attention. Good for you-and them! They are correct in saying that having a bank name and address is not a requirement of a negotiable instrument under the Uniform Commercial Code. However, the Federal Reserve will not process a check without the name of the drawee institution appearing on it, either in the form of a name and address, or included in the MICR line on the check. A fraction is not required, and, as a matter of fact, is omitted from some banking institution checks. It would have been more correct for me to say that the five requirements are necessary in order for an item to be negotiable in the U.S. banking system.