Question of the Week
Friday, March 30, 2018 7:55 AM

Question:  A non-member has come into our credit union wishing to cash a check issued by one of our members drawn on our credit union.  Do we have to serve this non-member?

Answer:  Yes.  Under the UCC 4-402 (as adopted by your state), refusal to accept this check for payment could be considered a wrongful dishonor, entitling your member to potential damages as a result.  The writing of a check is an order that your member made for you to pay another party, and by refusing to do that, you subject yourself to liability to that member for refusing to honor the check. 

Therefore, you cannot force the non-member to open an account, charge them a fee for cashing the check, or force them to submit the check through their own institution.  You may, however, request that the payee on the check:

  • Produce acceptable identification to show they have authorization to cash that check,
  • Delay the distribution of funds in relation to a branch’s cash constraints and demands,
  • Request all necessary information for the filing of a Currency Transaction Report of Suspicious Activity Report, per Bank Secrecy Act Guidelines.

If the non-member is unable or unwilling to accept the above terms, you may refuse service.  You may also have other rights based your account agreement with your member.