Check Payable to Financial Institution Risks

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Question:

Are there any risks for a financial institution if we accept a check from a client for deposit to their savings account and the check is payable to our financial institution, instead of making it payable to the account holder?

Answer:

If the check in question was issued by your depositor, I don't think there's added risk. But if the check issuer is not your depositor, it's possible the issuer intended for the check to be used for another purpose, such as a payment on the check issuer's loan at your bank, or to purchase a cashier's check.

As a general rule, a bank should not accept a check payable to the bank itself for any other purpose than to pay an obligation owed to the bank.