Q: Non-customer Checks. Is a financial institution required to cash an Economic Impact paper check issued to a non-customer?
A: No. As a general matter, a bank is under no legal duty to cash a check, even one drawn on the bank by an accountholder. However, the FDIC and other bank regulatory agencies have issued statements encouraging institutions to work with consumers and communities affected by COVID-19 developments. The FDIC recognizes that such efforts serve the long-term interests of communities and the financial system when conducted with appropriate management oversight and are consistent with safe and sound banking practices and applicable laws, including consumer protection laws. These efforts may include easing restrictions on cashing non-customer checks. For example, we understand some banks have voluntarily decided to cash non-customer’s economic impact checks without charging a fee. For more information on assisting consumers in light of COVID-19 developments, see the FDIC’s Statement on Financial Institutions Working with Customers Affected by the Coronavirus and Regulatory and Supervisory Assistance (FIL-17-2020), issued on March 13, 2020.
Moreover, pursuant to the March 19, 2020, Joint Agency Statement on CRA Consideration for Activities in Response to COVID-19 (FIL-19-2020), institutions may receive CRA consideration for easing restrictions on cashing out-of-state and non-customer checks. The FDIC will favorably consider retail banking services and retail lending activities in a financial institution’s assessment areas that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19 and that are consistent with safe and sound banking practices.
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time). This may be found on the FDIC’s website here: https://www.fdic.gov/Coronavirus/faq-fi.pdf.