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Joint Payees on Check; No Joint Account
I have a state-issued tax refund in both mine and my wife's name, with "and" between the names. The bank refuses to deposit it due to no joint account. We have separate accounts. They said that it has to be a joint account to deposit or cash, by law. Is this true?
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 No, it's not true. What is true is that you both have to endorse the check before either of you can negotiate it to cash it or deposit it. It would be perfectly legal for your bank to accept the check, endorsed by your wife and you, for deposit to your individual account.
The problem is that the bank is concerned about the possibility that your wife might allege several months from now that her endorsement is a forgery, in which case the check would come back to your bank. If you did not have funds to cover the check at that time, your bank could be left with a loss.
Your bank apparently has a policy that it won't accept checks requiring multiple endorsements into an account not jointly held by the payees. The bank representative may not realize that the problem is a policy and not a law, or may have found it more convenient to point to a law instead of policy.
Ask to speak to a manager or supervisor, explain the difficulty that the bank's apparent policy poses for spouses who choose for whatever reason not to have joint accounts, and ask for a waiver for the state refund check, and possibly your federal refund, too! If the bank continues to refuse, it says something about its willingness to assume the risk of a problem endorsement, its view of the value of your account relationship, or both. If for reasons of convenience or otherwise you decide you want to continue banking there, you might consider setting up a small joint account so you can negotiate two-payee checks without a repeat of this hassle. As for planning ahead, regardless of the outcome of this situation, consider the benefits of using direct deposit of any refunds in the future.
Published on BankingQuestions.com 4/02/09
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