Answer:
There is no OCC regulation on that question. It falls under the Uniform Commercial Code enacted by the state in which the bank is located (the UCC), tempered by a bank's risk-based policies on the checks it will accept for deposit.
The issue here is that there is no way for the bank being asked to accept such a check to verify the indorsement of the first payee. If that indorsement proves to be fraudulent, the bank could have to honor a claim for the amount of the check up to three years later, depending on the wording of other parts of the UCC. For that reason, some banks may adopt policies that they won't accept these "third party" checks for deposit. Others may accept them only from well-established customers who the bank believes will be available and able to cover the amount of the check should an indorsement issue result in a claim.
print
share