Bank Refusal to Cash Check Issued From That Bank

[Mars4Dude]

Nebraska

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.

http://uniweb.legislature.ne.gov/LegalDocs/view.php?page=s7723001000

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.

 

[Antigone*]

Nebraska

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.

http://uniweb.legislature.ne.gov/LegalDocs/view.php?page=s7723001000

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.

1 - You most likely were not cashing the check at the domiciling branch. In this case they probably could not verify the signer on the account and the check was in an amount that they were not comfortable cashing. It is perfectly legal.

Your bank cashed the check because they have recourse. That means that if for any reason this check gets returned unpaid, your account will be debited for the amount of the check plus their fee for handling the bad check.

By the way...A warrant is totally different from your standard payroll check.

 

[Mars4Dude]

Thank you for your reply. I understand it more. But what recourse does a common citzen have to recover what's due them without due recourse. Perhaps one should demand that ones employer pay one in cash... I do intent to inform my employer their checks are worthless...

 

[ecmst12]

Clearly the checks are not worthless - your bank honored it and you have the money.

 

[Antigone*]

Thank you for your reply. I understand it more. But what recourse does a common citzen have to recover what's due them without due recourse. Perhaps one should demand that ones employer pay one in cash... I do intent to inform my employer their checks are worthless...

Hope your employers takes nicely to that comment. Whatever you do, please don't come back here and post a question about hiring a lawyer because you feel you were unjustly fired .

 

[De Facto]

(1) Would a law requiring banks to cash check issued from their accounts have to be a State or Federal?

It could be either, as both the federal government and state governments regulate banks.

(2) Is it really legal for a bank to refuse to cash a draft from one of their accounts?

Yes. You are not the bank's customer, so the bank owes you no duty. Of course, the drawer could be liable to you for the bank's dishonor, and the bank could be liable to the drawer for the dishonor.

 

[great_ideas]

Hope your employers takes nicely to that comment. Whatever you do, please don't come back here and post a question about hiring a lawyer because you feel you were unjustly fired .

That is too funny. You know they will.

My husband and I closed an account at a bank that charged people to cash checks written form our account. I wrote my stepson a check for $25.00 to buy gas. He cashed it at the bank. They charged him $5.00. It was the branch that our account is from. He frequently comes to the bank with my husband. He has made deposits for us. Still, they made him present an ID, took a fingerprint on the check, and charged him. (There are only 4 tellers and they know us).