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Thread: Is a bank required to have adequate cash (FRN) on hand to cash out a large check?

  1. #61
    Quote Originally Posted by Magnus the Destroyer View Post
    Having no bank account and minimal ID (a state ID card I got merely for the purpose of being able to cash checks at banks and postal money orders without hassle) I will take checks that I receive in payment to a branch of the bank upon which the check is drawn and cash them there. Usually I have no problems, other than verification of the check with the issuer.

    I have in my possession a check for a low five-figure amount (in the teens) drawn on a state-chartered bank. I went to a branch to cash it on the same day it was issued but they claimed they did not have the cash on hand and would have to order it. I expressed the fact that I was miffed at this but instructed them to go ahead and order the cash and have it delivered to my hometown branch, and I let them know I would be expecting to go there and cash it the next day, and that didn't seem to be a problem. I got the branch manager's business card and was instructed to call her the next day to confirm arrangements.

    The next day (yesterday) I called the branch manager at the first location but she was out to lunch. Before I went over to the local branch, I called the Federal Reserve with the intent of asking what the regulations were regarding whether a bank was required to have the FRN on hand for a cashing a check of size, but all I got was a voicemail box, so I left a message. Being impatient, I went into the local branch to cash the check, but the branch manager said he had not heard anything about it from the other branch, then gave me the same line as at the other branch, that they don't have that amount of cash on hand and it would need to be ordered, and the soonest it would be was next Tuesday. At this point I expressed my displeasure with the bank's policy and accused them of check kiting. I told them that if I present a check for payment and they didn't have the funds then it was no different from if I had written a check for which funds were not available: it's fraud. The branch manager was unswayed.

    I called their corporate office and asked to speak with the CEO. I was able to get a hold of his executive assistant, who told me he was in a meeting and unable to talk to me at the moment. I told her I just wanted to talk to someone with authority to get my check cashed without any further delay. She took notes about my complaint and got my contact information and told me she would have someone get back to me. I did not hear back from anyone by end of day.

    When I went back to my office yesterday I did some research in California Jurisprudence and so far have only found information dealing with the criminal aspect of knowingly passing checks with insufficient funds. This does not cover the present situation, where the check is good (the drawing entity certainly has the funds) but the bank claims they don't have the FRN to cash it. I did get a call back later in the day from someone at the FR but she was unable to help, as the bank is FDIC regulated. She also was unable to cite off-hand any regulation regarding the amount of FRN a bank must have on hand for daily operations. I submitted a complaint to the FDIC via their website but the form said if they can answer the inquiry without having to call the bank in question then I would receive a response within 10 days, but if they had to consult with the bank then the reply would be within 60 days. Egads.

    Now, this situation is not confined to banks. Would you believe the US Postal Service is one of the worst check-kiting offenders out there? TWICE now, once a couple weeks ago and again yesterday, I brought in a money order that the clerks admitted they could not honor because they didn't have the money in their tills. In the first instance it was a MO for $800, and yesterday's attempt was for $500. Apparently, the only FRN they have at their disposal is what they get from customers that day, and if there isn't enough in the tills to cover it then they basically tell you that you are SOL. Numerous calls to the local and regional and national Postmasters General resulted in getting NOWHERE. Absolute cluelessness seems to reign supreme at the USPS these days.

    What is going on here? I thought that if I take a check--certainly a money order--into the institution upon which it is drawn, they have to give me the cash. With the banks, I can kind of see where they would get an out, because they are banks, and banks are apparently immune from the requirements of banking and contract law these days. But with the post office money order, which is supposed to be as good as cash, I don't see how them not having enough money to cash one on demand is anything but a fraud. In both cases, I was able to have the MO honored later on in the day, after the PO had done sufficient business to fill their tills with cash. However, I don't deem it acceptable to be told to "come back later". I don't want to come back later; my time is valuable and gas costs money, and you're supposed to honor these stupid pieces of paper on demand.

    Does anyone have any insight on this matter that they can share with me?

    Thank you.
    To answer your question, it doesn't have to have the cash on hand.

    They can delay you for several days in order to acquire the money. One way this is possible is via interbank lending.

    A bank only has to have a percentage of cash on hand for day to day transactions. This falls in line with fractional reserve lending.

  2. #62
    In both cases, I was able to have the MO honored later on in the day, after the PO had done sufficient business to fill their tills with cash.
    Vault-free banking.

  3. #63
    OP should have asked for $500 in KENNEDY HALVES !!

    .....y'know.....cherry-pickin' the silver

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