Dear Dr. Don,
Does a bank have an obligation to cash a check that has the very same bank’s name on it? The bank is the guarantor of the check and proudly displays this information. Yet, is it right that when the check is presented they have no obligation to instill confidence in their check? In my opinion, charging a fee is a farce despite the fact that I’m not an account holder there. The check is theirs! What do you think?
— Ronald Ruffled
Checking accounts are called demand deposit accounts because a check drawn on the account is payable on demand. You have a check payable to you, drawn on a bank account. You go to that bank to cash the check, only to be told that you have to pay a fee to cash the check, because you’re not a customer.
You get to choose whether you’re willing to pay the fee to get the money. If you don’t have a bank account of your own, the fee the bank charges is likely to be a lot less than going to a commercial check cashing service.
While I understand your frustration, the bank is within its rights. The Office of the Comptroller of the Currency, or OCC, tackles this issue on its website, Answers About Cashing Checks.
It states, “There is no federal law or regulation that requires national banks to cash checks for noncustomers. Most banks have policies that allow check cashing services only for customers who have an account with them in order to protect both themselves and their customers from forgeries.”
It goes on to say, “Also, if a national bank agrees to cash a check for a noncustomer, it may legally charge the presenter a fee.”
The OCC charters, regulates and supervises all national banks and federal savings associations, as well as federal branches and agencies of foreign banks. It is an independent bureau of the U.S. Department of the Treasury.
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