Recently the issue came up of the practice of exchanging an on-us check from a non-customer for a monetary instrument, namely a cashiers check. A customer of ours may have some work done on his home and present a check to the contractor. The contractor comes to our Bank wanting to convert our check to a cashiers check. If he deposited the original check in his own bank then possibly it would be held via Reg CC. Currently we are making the conversion from on us check to cashiers but several questions come up

1. We sell cashiers check to our own customers only. Do we violate our policy by this method ? 2. What about OFAC ? Since we sell cashiers check to our own customers, we have instructed our staff to OFAC the payee. We have not been ofacing the remitter. 3. ID issue - We log IDs of $3M sales for cash done for our customers. However, we don't have ID's of this customer converting our check to a cashiers

These are potential problems identified. Does your bank have a similar practice ? Do you have any recommendations on how to proceed ? Thanks

You are violating your own policy by selling the cashiers check to a non-customer. If you are checking OFAC for monetary instruments, then you should check the remitter if it is a non-customer. I would get ID from them. However, you should also consider that if the check is written to a company name, you should not exchange it for a cashiers check unless your bank has a policy to allow cashing of checks made out to a company name.

I've never gotten as far as the BSA issues in analyzing this one. First, if the payee wanted a cashiers check from your customer he should have asked for one. You are not obligated to fill the gap.

Second, if it's an individual with appropriate identification that's one thing. If it's a company, that's something different. Prior thread.

The actual wording of your policy or procedure preventing sales of official checks to non customers should be compared to the transaction posed.

I am holding a check payable to Jokerman's Plumbing. I deposited it at my bank, and it was presented to your bank, but has been returned NSF. I call your bank, and am told that the item will clear today. I show up with the item, but you won't cash the check, because it's payable to a business. What will you do for me?