Checking The OFAC List, Official Checks, And Payees

Question:

We are having a discussion regarding OFAC and the checking names of payees for cashiers checks. One person believes all names must be checked, purchaser status customer and noncustomer. The second opinion is: names of payees for cashiers checks purchased by noncustomer only are to be checked. Who is correct?

Answer:

From the Q & A on the OFAC web site: Does my bank need to check the OFAC list when selling cashier's checks and money orders? In the case of cashier's checks, do I need to check both the purchaser and the payee? As a mortgage lender, do I need to check both the purchaser and the seller's name against the SDN list?

Every transaction that a U.S. financial institution engages in is subject to OFAC regulations. If a bank knows or has reason to know that a target is party to a transaction, the bank's processing of the transaction would be unlawful. [091002]

From Ken: In pure "governmentese," I think it says you need to check both. If you only sell official checks to accountholders you dramatically reduce, but do not eliminate, your concerns over checking the remitter.

First published on BankersOnline.com 2/3/03