Early Cashing of a Post Dated Check

Section 4-401(c) of the Uniform Commercial Code (check your state's version of the UCC) provides the following:

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.

Note that the text says that the bank may charge the account. The only limitation on the bank's right to charge the account is a notice from the customer that the check is postdated. The language was added to the UCC to recognize the fact that banks do not check dates in today's automated check-processing environment. That said, if a bank does take notice of the post-dating of a check, such as at a teller window, it may refuse to honor the check because of the date. That circumstance is not described in the law and one cannot infer that a bank must check dates at the teller window.

First published on BankersOnline.com 8/25/08