Are there any limitations restricting the amount that a financial institution may charge for cashing checks? If so, where may I read up on them?

Thanks,

Lisa

From the Texas Department of Banking website:

Question: Can a bank charge a check cashing fee to non-customers?

Answer: Institutions are allowed to charge a check cashing fee. In the 77th Texas legislative session, a law (SB 314) was passed requiring banks to pay a check at "par". Basically, this meant that if someone attempted to cash a check at the bank where the check was drawn, the bank would have been required to remit the full amount of the check. On August 30, 2001, Judge James R. Nowlin of the United States District Court in Austin, Texas, issued a preliminary injunction allowing five banks to continue charging check cashing fees to Texas citizens pending trial on the challenge to new Texas law. These five banks were as follows: Wells Fargo Bank Texas, N.A.; Bank of America, N.A.; Bank One, N.A.; Chase Manhattan Bank; and Comerica Bank, Texas. The Department issued a press release on August 31, 2001 regarding this matter. Since then, the court ruled that the Texas law was not enforceable and therefore the institutions could continue the practice of charging a fee for cashing their checks.

Galveston, I've tried to find this on their website. Would you provide the link for the information; I would like to show my COO.

Thanks,

Lisa

What is the typical amount charged? Our bank is considering charging, but not sure of how much. I have heard several amounts such as a flat amount of say $5.00 to 1% of the check amount. Any ideas from those of you charging? G

Be careful about asking too many people how much they charge for a specific service. You don't want to get into a price-fixing/anti-trust situation. Your fees are suppose to be based on your cost of doing business plus a reasonable profit and staying competitive, not based on discussions with your competitors. You can search these forums and see a number of comments on this issue.

National Banks have to specifically comply with:

12 CFR §7.4002 National bank charges.
(b) Considerations. (1) All charges and fees should be arrived at by each bank on a competitive basis and not on the basis of any agreement, arrangement, undertaking, understanding, or discussion with other banks or their officers.

I don't think what you asked will create any problems - it was just a caution. Many banks use, either a shopping service to do comparison pricing for them or you could do it the old fashion way that I use to do it - drive or walk to all your competitors and ask them for their service charge brochure.

If you want to really get them excited, ask to see their CRA Public file while you are at it

I had a friend of mine who was the compliance officer at a competing bank call me in a panic and ask if any activist groups had been to my bank asking for the CRA file one time - I didn't have the heart to tell him it was really me on one of my "shopping" trips.

Randy, you are a bad boy! I hope one day you do tell him it was you.