We've had several customers lately that went to the drawee bank to transact a check written by drawee bank's customer; either attempting to cash or get a cashier's check. The customers were told they couldn't do the transaction because they didn't have an account at said bank. I recall something a while back that this qualifies as wrongful dishonor by the drawee bank but I can't find anything to support this now. Does anyone have insight on this?

FWIW....We cash checks drawn on us for non-customers with proper ID.

Are the payees of those checks individuals or businesses?

Individuals

It's not wrongful dishonor if the drawee bank has a clause in their account agreement with their customers that they will not negotiate checks for non-customers over the counter. The OCC mentions this practice on one of their consumer facing FAQs.

https://www.helpwithmybank.gov/help...g-checks/check-cashing-non-customer.html

Thank you!