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Make Check Payable to Bank to Get Cash?
I just moved to a small town and opened a checking account. When I went to withdraw some cash, I was told to write the check payable to the bank and to endorse the back and they didn't ask for ID. This bothered me a lot. Isn't there a banking law to ask for ID because there is so much fraud and theft today? It should be required by law, or by the government. Another thing is, why make it payable to the bank? I am not paying the bank, I am wanting cash for myself. I have been in banking and have had much training on this and have been screamed at by customers for asking for ID, but I used to tell them it was just protecting their money. This bank I am referring to did not ask me for ID, and was confused thinking I was a non-customer, did not even look at who the check was payable to or signed by, and did not look at ID. This was crazy and the tellers need professional training. I told my husband that we will not put any more than a couple of hundred in that bank because of lack of customer protection and security.
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 There's no banking law that requires a bank to ask for identification when cashing a check. There is, however, the rule called common sense, and unless the bank teller knew you, you certainly should have been asked for identification. One mitigating factor might be the bank's ability to provide its tellers a copy of account signatures at the teller window in a check-cashing transaction. That is not the same as obtaining an ID document, but it does help prevent fraud.
As for making the check payable to the bank, the preferred policy would have been to have you make the check payable to yourself and endorse it at the time of the withdrawal. Conventional wisdom is that checks payable to the bank ought to be for payments due to the bank (loans, safe deposit rental, IRA trust fees for example), for tax deposits being made with the bank, or for payments accompanied by specific instructions to credit the account of a bank's customer.
Convenience and pricing are usualy the primary factors influencing one's choice of a bank. Equally important is professionalism. That means the customer should feel confident that things are being done correctly. When there is evidence that something as basic as check cashing is handled sloppily, one wonders what else might not be done well.
You clearly have the option of voting with your feet, and leaving this bank if it doesn't meet your expectations, but you might also choose to speak to a bank manager to ask about the bank's policies concerning identification and how checks ought to be made out for withdrawals. Until you talk to a manager, you may not have a clear view of the bank's policies. It may be that your teller didn't follow bank policy or procedures and ought to get some training, and your opinion of the bank may improve.
Published on BankingQuestions.com 8/11/09
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