Ask Me Help Desk - $5 Charge to cash a check

$5 Charge to cash a check

A short time ago I accepted a $300 personal check as partial payment for a vehicle. Rather than depositing the check in my B of A account, and running the risk of a bounced check charge from my bank if it failed to clear, I took it to Chase Bank, which it was drawn on to cash it. Since I was not a Chase customer, they nailed me for $5 to cash the check. Their rationale was that they were providing a service to a non-bank customer. In bit**ing about this to my friends, I was told that most, if not all banks have this rapacious policy. I am considering donning my Crusader Rabbit costume, and pursuing this with the AZ Banking Department and any other regulatory agency in the loop. Have I lost my mind?

Wll you took a 300 dollar personal check for payment on a vechile, so yes just that tells us you have lost your mind.

But it is a good cause, we all need our windmills to fight against, Bank charges are one of them,

That is a funny post... seeing as I'm actuallly a Branch Manager for JP Morgan Chase!!

When you cash a check anywhere unless you are a member of the bank there is a cash checking fee.

What is the injustice? You paid for a service. They have a right to make a profit. You have the right to go somewhere else.

The point that I tried to make is that I was NOT free to go elsewhere to cash the check. Citibank will not cash a check drawn on Chase. If I deposited the check in my B of A account, I ran the risk of incurring perhaps a $25 charge if it was NSF. In fact Chase was providing a service to their customer, for which that customer pays a monthly fee. :)

Except you ARE free to go to your own bank. You always had that option... but you were unwilling to because you feared that the check would bounce. THIS is not the fault of either bank, but you.

Yes, Chase was performing a service for their customer. You are not their customer.

I guess beauty is in the eye of the beholder.:)

I don't think it is ethical, might be legal, for a bank to charge a fee to cash a check drawn on them. The bank is providing a service for the writer of the check.

The next time call the bank and see if there is enough funds to cover the check. A bank will give you that information. If there is enough funds, then run it through your own bank.

Quote:

Originally Posted by hoightoider

I don't think it is ethical, might be legal, for a bank to charge a fee to cash a check drawn on them. The bank is providing a service for the writer of the check.

The next time call the bank and see if there is enough funds to cover the check. A bank will give you that information. If there is enough funds, then run it through your own bank.

You cannot call a bank and request information on an account of which you are not a signer. To protect the privacy of the customer, no such information will be released. Furthermore, if you attempt the cash the check at the another's bank, of which you are not a signer, and funds are insufficient, the teller/banker "should" tell you simply that he or she cannot cash the check at that time and refer you to the remitter. Any additional information is considered a compoimise of account information,
JPM Chase Branch Manager.

Should have taken the check writer with you to his bank at the time he wrote you the check and had him give you the $300.

This seems to be the status quo for banks these days. I agree that the service is provided to the HOLDER of the account, and that banks should cash checks drawn on their accounts for no charge, as long as people show the proper ID. Banks used to do this routinely. But banking has changed so much now that the fees seem to be inevitable. Sometimes you can get around this charge if you have a credit card from the bank (especially if it's a big bank like B of A or Citi).

Since check was written after hours, Wayne's solution was not possible. Todd's idea is good. I have a Chase CC, but did not think to present it.:)

It is totally unethical. The bank is holding the money for their customer. Their customer executes a financial instrument conveying part of that money to a 3rd party. The bank on which that financial instrument is drawn is the ONLY entity that can ultimately pay that check. The 3rd party may NOT even have a bank account anywhere. The bank is obligated to pay the financial instrument generated by their customer, and, as others have pointed out, they are already charging their customer various fees for having the account. Take the example where the bank customer writes a $5 check to a 3rd party who doesn't have any bank accounts. The 3rd party would have no way on this earth to cash that check. The bank would cash it and keep the whole thing for the fee. GIVE ME A BREAK, WHAT IS THIS COUNTRY COMING TO??

If the 3rd party deposits the check in his bank, then his back will ultimately present the check to the bank upon which it was drawn for payment. THEY DON'T CHARGE THE BANK FOR PAYING IT, SO WHY SHOULD THEY CHARGE THE 3RD PARTY. THE OTHER BANK ISN'T THEIR CUSTOMER EITHER!! IN FACT THE OTHER BANK IS THEIR COMPETITOR!! FIGURE THAT OUT!!

There is no requirement or law that obligates a bank to cash a check for a non-accountholder. The OCC (Office of the Comptroller of the Currency) notes that banks may choose to cash the check for a non-accountholder, and those that do so may choose to charge a fee for the service.

Likewise, it the also the choice of the payee who received the check where they negotiate it (either by deposit, or by cashing it).

Banks that cash non-customer checks must maintain higher average cash levels in their vaults than banks that do not cash customer checks, in order to meet these non-accountholder cash request. Larger national banks must carry a proportionately larger cash level per branch than smaller banks due to the larger number of check-writers. Moreover, they must do so at EVERY branch they operate that provides this service to the non-accountholder. The additional currency that must be maintained in the vaults could otherwise be invested by the bank if not reserved for check-cashers. At large national banks (those most likely to be seen charging this type of fee), the amount of non-invested cash is substantial. This represents a hard cost to the bank, and the bank is entitled to defray that cost through the charge for cashing the checks.

Non-customer check cashing also takes (paid) time from teller staff and supervisors that could be given to bank customers, and these transactions also contribute to longer wait times for the customers of the bank.

It seems odd that people cry foul so vigorously on this point when they so readily accept the notion of paying an ATM surcharge for withdrawing cash from another bank's ATM. The bank paid a large sum for ATM equipment, installation, cash supply, and servicing. They do so for the benefit of their own customers. If a non-accountholder chooses to use their ATM, they are charged a fee (usually $2.00 or more, and usually for withdrawals as low as $10.00 or as high as $500.00). If they do not want to pay the fee, they cancel the transaction, but most proceed and probably do not call to complain about the charge.

Similarly, when a bank builds a branch, it pays a monumentally larger dollar amount for the building, equipment, staff, money supply, and servicing. They do so for the benefit of their customers. Yet if a non-accountholder chooses to use that branch to cash the check instead of using one of their own bank's branches, they are charged a fee. They can refuse and cancel the transaction as well. But this seems to escalate immediately to a complaint despite the parallel. If it is a $5.00 fee for a $1000 check... that is a 1/2 of a percent. A $2.00 fee for a $20.00 ATM withdrawal is 10%. Why is this fee such a hot-button?

You miss the whole point. The check is drawn on their bank. They ultimately have to pay the check to someone (the 3rd party who received the check from their customer, or the 3rd party's bank when it is presented for payment). Comparing it to an atm transaction is like comparing apples to oranges, not the same at all. If i get a check as payment from someone and i don't have a bank account anywhere, the only place on earth that can cash that check is the bank it is drawn on. Why should they charge me for honoring their customer's financial instrument? It just doesn't make sense. It has nothing to do with whether i am their customer or not. They have an obligation to honor their customer's financial instrument, whether it be in person or through another bank.

Also in response to JOEDLAN, Your comments about the huge expense to install ATM's etc. is also way off. I worked in the banking system many years, and ATM's were cost justified from the savings achieved due to lower personnel needs (salary & benefits), way back when ATM's were first invented. I'm sure that hasn't changed. I don't have a problem paying a fee to a bank where I am not their customer; that actually makes sense to me. I do think some of the banks charge too much.

Any bank should have enough funds on hand to pay their customers checks without charging for having those funds Joedlans argument is a defense for the entire banking liabilities and does not justify a bank gouging on a check written from them and I personally checked with 3 banks I do business with and they do not do this practice (everone who walks through that door is a customer it would be foolish to chase away business with bad practice).I would not do business with banks that do non ethical transactions and eventually they will change their ways and give the great services they all promise.

Signed,happy with my banks.

This really ticks me off too! To the point of a 150 fine for disorderly conduct. It seems to me that the maker of the check has an agreement with their bank that their checks will be paid upon presentation to them for payment. If so, then what service is it? Its no service to me but their obligation to their depositor to pay the sum they tell their bank to pay when they write the check. It seems to me that joe the payee should not be mistreated anymore than the big banks who present the checks for payment from their depositors. In any event isn't the holder of the check to be paid cutting out the middleman of another bank to present the check for them?