I recently attempted to cash a payroll check at the bank from which the draft issued. Even with proper I.D. they refused to cash the draft as I didn't have an account there. I was under the impression that a bank had to honor draft issued by their account holders. However, in researching the forum, it appears as though a bank is under no such obligation. Please correct me if I am wrong about that. In looking through Nebraska State statues I discovered the following:
Section 72-1268(2)(a) Every bank, capital stock financial institution, and qualifying mutual financial institution shall, as a condition of accepting state funds, agree to cash free of charge state warrants which are presented by payees of the state without regard to whether or not such payee has an account with such bank, capital stock financial institution, or qualifying mutual financial institution, and such bank, capital stock financial institution, or qualifying mutual financial institution shall not require such payee to place his or her fingerprint or thumbprint on the state warrant as a condition to cashing such warrant.
I really have two questions. (1) Would a law requiring banks to cash check issued from their accounts have to be a State or Federal? (2) Is it really legal for a bank to refuse to cash a draft from one of their accounts? I just think it's wrong for a bank to charge the account holder services and then not honoring those services. Also, if the state can make an agreement to cash a warrant free of charge, why not its citizens?
P.S. My bank cashed it with no problems as I am in good standing with excellent credit.