[David Merrill]

I have not verified this but the UCC says:

§ 4-205. DEPOSITARY BANK HOLDER OF UNINDORSED ITEM.

If a customer delivers an item to a depositary bank for collection:

(1) the depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of Section 3-302, it is a holder in due course; and

(2) the depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.

http://www.access.gpo.gov/nara/cfr/w...cfr762_04.html
http://a257.g.akamaitech.net/7/257/2...9cfr762.29.htm

(b) Endorsement of disbursement postal money orders by a financial organization under the payee's authorization. When a Disbursement Postal Money Order is credited by a financial organization to the payee's account under his authorization, the financial organization may use an endorsement substantially as follows:

Credit to the account of the within-named payee in accordance with payee's or payees' instructions. Absence of endorsement guaranteed.

A financial organization using this form of endorsement shall be deemed to guarantee to all subsequent endorsers and to the Postal Service that it is acting as an attorney in fact for the payee or payees, under his or their authorization.

So my initial gut reaction to the stamp was correct. A bank can cash a check without endorsement by simply making the drafter of the check liable for the cash. And maybe I see why the folks at Quatloos make fun of me for thinking that checks must be endorsed. Here is the thing though. I have tried to cash checks without endorsement and been told by higher-up teller/managers "no way"*. So thumbs up to the clever Quatlosers! They got me on that one alright.

Henry said it well:

Mikah2K, When one endorses a check or other commercial paper, they become a surety in the chain of the instrument, lending their credit to the instrument. Now, I don't know what that endorsement means, but it may mean that the payee (or depositor) stamps that on there to alleviate a named person from being liable in that chain. It would be good to check the UCC for your state to see if the words Endorsement Guaranteed come up.

As money is amplified (fractionalized) by loaning against only a percentage the accounting is accurate. The loans are generated by check and the loan application is a sturdy endorsement, whether the lendee endorses the check or not. (I am sure that 99.99% if not 100% of these loan checks are signature endorsed.) It appears that with any subsequent checks generated the general accounting services wish to have as formal and thorough of an accounting about who is handling (liable for) the cash cashed. So there is a general illusion that the drafter will not take liability; the person cashing the check must endorse the transaction http://www.worldnewsstand.net/history/pay_debts.htm and spread the Grace. [Stay ahead of the law.] After all, it is clearly a con game. You are especially culpable if you know that FRNs are not money and give the FRNs to somebody on the presumption they do not.


Regards,

David Merrill.

[Using the wisdom of Quatloos researchers to sound wise here on Suijuris. http://www.quatloos.com/Tax-Forums/v...e5 4ce2ff2d17 And of course this tips Prof's hand that he surfs here for the Quatloos Insultinator.]

* I even typed up a statement for them to sign that they could not cash a check without endorsement and presented it before leaving the bank. Guess what? They refused to sign it.