If a non-customer has proper ID are we obligated to cash a US treasury check.

Unless you have a state law to the contrary, no.

I agree with John, there is no obligation.

It was a long time ago but I remember a situation where we refused to cash a Treasury check for a non customer. The party then filed a complaint with the Regulators and with the Treasury department. The difference in situations is this party had ID

What resulted was the treasury department stated that they had the authority to cancell our ability to provide such services as issuing and cashing savings bonds and unfortunately I cannot remember the specific statute but they cited one.

This was one of the big 5 Calif banks at the time with 800 branches and did not want a problem with Treasury or regulators so we caved.

If someone has the patience to go through the process, call,the Treasury and see if they have any idea if a requirement exists.

Even if it is a treasury check and you have ID there is still some potential liability. One of our tellers cashed a $5,000 treasury check for a customer who had stuck us several times with forged checks. Every teller in the bank knew her and knew what she had done in the past but hey, it's a treasury check - it's good. Two months later we get the check reclamation from the treasury and an affidavit signed by Ms. Check forger. She said she never got the check and that someone had stolen her ID. We protested and lost so we had to cough up the $5,000. Only later when she came in and cashed the replacement check and we submitted the replacement check for comparison to the original did we get the money back, after over a year and a ton of paper work and phone calls.

Once again I have wandered far from my point which is I don't think that the treasury can make you take the risk of cashing a check for a non-customer.

A savings bond cashed as an agent is not the same thing as being asked to cash a Treasury check. I'm with John on this one--if there is no state law to the contrary, we do not have to cash the check. I think the Treasury spokesman was way out of line if he insisted you had to cash a check for a noncustomer of your bank. Maybe he should spend a few weeks working in your bank's security area investigating some forgery and fraud cases.

We have a branch of FRB here in town, why don't they open a check cashing window??

Has anyone considered the CRA aspect here? If some (or many?) people who cash US Treasury checks are in the low- to moderate income level, this could be a way to enhance the service test for CRA. Is anyone cashing these checks for CRA purposes?

I think the problem is the risk from a fraudulent endorsement probably wipes out the meager CRA credit you might receive.

This is where perhaps one of these community/advocacy groups can step in. If they would like the Bank to cash these items for non-customers, then perhaps they could establish neighborhood programs where they would be in a better position to properly identify the payee. The group could "vouch" for the identity of the person and have a bond or pledged account to pay for any items returned because of fraudulent endorsement.

And if I understand correctly, the Treasury Department can take up to 3 years to return a check for fraud endorsement?