Answer:
Normally, a bank is under no obligation to cash a check for a non-customer. However, when the check is drawn on the bank, the bank is obligated to pay the item if the payee can furnish proper identification (assuming the item is properly payable in all other respects.) [Note that in some instances this may mean that the bank will give a cashier's check as payment, if the payee is a corporation or other legal entity, rather than an individual.] Some institutions even charge a fee for such a service, although the validity of such fees has been the source of discussion and disagreement among legal experts. Also check your state laws to make sure the state legislature have not adopted a similar provision.
As to your second question, unless your depository agreement allows the bank to refuse to allow a customer to withdrawal a large amount of cash without notice, the bank can not refuse to honor the customer's request absent any other unusual circumstances. Some banks have preprinted information handouts that alert the customer tothe various types of frauds and schemes that they may be involved in. You can strongly suggest to the customer that the withdrawal be made by cashier's check or wire transfer but you can not refuse to comply with the customer's request without possibly being liable for lost opportunity costs if the transaction is legitimate. In addition, some institutions require the customer to sign a written statement that indicates the bank warned of the possibility of fraud and the customer after being informed still requested the cash withdrawal. This procedure should protect the bank in the event the customer is defrauded and tries to hold the bank liable for not stopping the transaction.
First published on BankersOnline.com 1/15/01
print
share