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Home >> Checks/Money Orders >> Checks You Received
Trouble Depositing State Check in Different State
I was employed by a California State university and was on the state payroll. I received a check last June before I moved to Maryland, and deposited it in Maryland in August. It was returned in December. I later found out that my bank in Maryland sent an electronic image of the check in accordance with the federal law, but that California does not recognize this law. They only accept manual processing of the check itself.
I asked for a duplicate check from California, but they sent one without the warrant/ account number at the bottom. They attached a piece of paper that said that the lack of warrant and account number at the bottom could be confusing to the bank and that the bank should contact the state via the phone number they included.
My bank in Maryland wouldn't accept the duplicate check and the state of California insisted that my bank send it in for manual processing which my bank does not do. I was then advised to deposit it on collection basis, but have heard nothing regarding the issue since. What should I do? How can I go about getting the funds from this check?
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 You've been caught in a disconnect in the check collection system. Your Maryland bank has every right to submit checks to the collection system in electronic, i.e., image, form, and the paying bank, in this case, that includes a state treasury that acts as a bank, has every right to insist on paper. In this situation, the California bank or agency should have required that the bank in the middle of the collection process reconvert the image submitted by your bank into paper form as a substitute check. The substitute check is a legal equivalent for an original check, and cannot be refused for payment simply because it's a substitute check. If your Maryland bank did take the check for collection, you should ask them to follow through by sending a tracer or other request for status.
If the check has not yet been entered for collection, contact the California issuer and indicate that they have put you in a "Catch 22". Ask them if they are able to send you your money via direct deposit or wire transfer. That will require that you provide them with the routing information for your Maryland bank account. Ask the Maryland bank for help in getting the correct numbers.
For those of you who are reading this tale of woe and thinking, "Thank goodness I haven't run into this sort of problem," take away this advice: when you are due money in situations like this, and have the choice to opt for direct deposit of the money due you, grab that chance. Make sure you've got an account set up to receive the payment, verify the routing information for that account with the bank or credit union, and tell the remitting party you want your money paid by direct deposit or wire transfer, if that's available and direct deposit isn't.
Published on BankingQuestions.com 4/03/08
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