Can anyone tell me if there are written rules somewhere regarding liabilities for entities that sell personal money orders? Are money orders the same as "negotiable instruments" or "checks" or are they governed by "cashier check" rules? Besides UCC 3-104, where else do I look?

Thanks!

Check with your state banking department. They probably have to be licensed and have bonding requirements.

Al's right about the licensing requirements. In Oklahoma, for example, the applicable law is called the "Sale of Checks Act" for sales of money orders and similar instruments.

Typically, state law does not require an insured depository institution to obtain separate licensing to sell money orders. A true personal money order is treated as a one-shot checking account under the UCC. It is a money order on which the drawer is considered to be the individual, rather than the bank. As a result, a stop payment may be applied (unlike with a bank money order, where the bank is the drawer and it is the equivalent of a cashier's check or teller's check.)

If you dont have the book Brady on Bank Checks, I would highly recommend it. It is the best resource available to anyone dealing with money orders or checks.

Thanks for all of the great input. It really helped!