Posted on 07/09/2009 10:01:30 AM PDT by Danae
A funny thing happened at the bank on Wednesday (June 8th). CHASE bank in Newberg Oregon refused to honor two corporate checks totaling over 6 thousand dollars. Despite the fact that the funds were available from the account holder in question, CHASE refused to honor the checks and cash them. Upon demanding that Chase honor the checks written on its bank, I was told that if I wanted the funds, that I would have to open a business account with them in which case they would hold the checks until they cleared the account they were written on, in the same bank, which “would not happen immediately”.
(Excerpt) Read more at examiner.com ...
I’ve heard about this for years how some banks wouldn’t cash checks drawn on their own accounts if you don’t have an account with them.
You said — I think that legally, they must honor the check (you know how it is with a “demand” account) or suspend business, provided the presenter has adequate identification and the account has sufficient funds. Take it to a different branch.
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They don’t have to *cash it* — if it’s written to another business. Not at all. This has been what banks have been doing for a very long time that I’m aware of...
I closed an account there after they started charging outrageous account maintenance fees. Credit unions are the way to go.
I think there’s a whole lot of this story missing.
I know you’re trying to be funny. Do you think perhaps that wasn’t the best thing to post, that in retrospect that wasn’t really that funny?
You said — They’re probably just out of money.
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Not at all. As far as I’ve known, it’s always been the policy of banks to never cash checks that are written out to a business. It’s nothing new or different than what has always been done, as far as my own experience has shown me.
Basically they are saying that you are not their customer so they are not going to extend themselves for you. Usually the problem is that the company who wrote the check has a spotty history.
The solution is to only accept cashier's checks from the check writer.
No real surprise here. It’s standard policy in these parts that a bank will only cash it’s OWN check for a fee if you don’t have an account there. I recently ran into that at my local Wachovia. I didn’t want a Wachovia account and ended up paying $5 for the privilege of getting dismissive looks from the teller. That’s why I bank with a credit union, but those guys are becoming more government infested and tougher to deal with by the day also. I also ran into quite an issue getting a certified bank check deposited into my CU account. They following their policy to the letter, and would not even call to see if the thing was good (I had previously done so). In defense, bad checks, forged checks, fake checks and other frauds are epidemic right now.
You said — All of the banks are just sitting on stacks of cash laughing their asses off.
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Well, that’s probably been true as long as banks have existed. But, that has nothing to do with this particular story.
You said — Sue them!
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For what?
My bad, I thought it was written to person.
Might try writing it on a paper check instead of writing on the bank?
I agree with not being able to cash a Business -> Business check.
Also, for that large of an amount, they usually have a 7 day holding period to make sure everything is legit.
We’ve run into that with my wife’s business on occasion.
Can, without violating your privacy, supply any more details on the situation?
- what is the relative size of the business that wrote the checks?
- do you have any idea how long they’ve been in operation?
- more importantly, have you contacted the business that wrote the checks and asked them what they think of Chase’s actions?
If the business that wrote the checks is sound, and there isn’t anything “funny” going on in their accounts or business, Chase’s refusal to honor the checks is a big red flag. If you’re in possession of a bunch of facts you can verify, I’d be calling into Chase in NY, telling them that you write a column (ie, don’t sandbag them, tell them their conversation is ‘on the record’) and start asking why your local branch gave you this run-around, because for any small business owner there is ONLY ONE conclusion that can be taken away from this encounter:
Chase is not honoring checks drafted on Chase accounts.
This is the sort of thing that starts a run on a bank. Not a pseudo-run-on-the-bank -— a no-crap, everyone lines up on the street with their checkbook in hand, demanding their money in CASH, run on the bank.
Were the checks made out to you personally, or were they made out to a business?
I had this problem in Birmingham over 10 years ago. The check I had was in the neighborhood of 4000 dollars and was made out to a small company I owned at the time. I was under the impression that I could just walk in and cash it. Wrong..if it had been made out to me, with my name on it I could have. Finally I had to deposit it into my Company account at a different bank and wait 5 days for the funds to clear. I was mad at the time but as I look back on it now I can see the banks point of view. They didn’t know if I was the sole owner of the company the check was made out to or not. I’m think that was the problem the person in the article had.
You said — ...apparently they just wanted a business account rather than a personal one.
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If it’s written to a business name, you have to have a business account to cash the check... (and you really don’t cash the check but usually write another check to yourself), or write out a withdrawal slip and sign that, as the authorized person to do withdrawals.
I reported a few weeks ago when the local Chase Bank where I had both business and checking accounts would not cash my paychecks. The bank staff knew me well since my company has had about $2M flow through my accounts in the past few years.
Of course, I closed my accounts the next day.
I have been worried about a “run on the banks” a la 1932. The big banks are insolvent despite the best efforts of the Fed to save them, and the FDIC is broke.
It feels to me like the next leg down in Obama’s Depression is about to happen.
Sometimes people only learn when they experience enough pain. Maybe Obama’s supporters will figure this out before 2012.
There’s been a slough of counterfeit Chase checks lately. Friend’s nephew got one in the mail for $5000 in a craigslist scam as $1500 rent/security deposit on an apartment he was leasing. The guy was from NY and wanted him to send him the $3500 difference. 10:1 it was one of those busted in your link above.
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