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*** also argues that these pension checks do not meet the definition of "deposit" until their due date arrives. And if these drafts are deposits, the next step in this analysis will be to determine whether or not preissued, postdated cashier's checks are bank liabilities. 1980) ("a postdated check is not, prior to date, a "check' as defined in [U. C.] § 3-104(2)(b), since it is not payable on demand"'). Furthermore, *** postdated cashier's checks are not outstanding drafts or money orders primarily because, unlike these latter two forms of negotiable instruments, postdated cashier's checks do not represent effective obligations until their due date arrives. Regardless, and even if *** postdated cashier's checks are construed to meet the definition of "deposit", *** postdated cashier's checks are not *** liabilities until the due date arrives.

Your *** memorandum states that the *** considers official checks released by a bank for delivery to be issued and outstanding. On the reverse of each draft, *** printed the following statement: "This check must be personally endorsed by the payee in ink in the payee's handwriting." (Emphasis supplied.) Therefore, whereas an "outstanding draft" constitutes an effective but unpaid obligation, a preissued, postdated cashier's check is not an effective obligation until the due date, and *** cashier's checks consequently are not outstanding drafts for purposes of what is a "deposit". Therefore, a preissued, postdated cashier's check is not a "money order".

Furthermore, your memorandum states that issued official checks meet the definition of "deposit". Therefore, you state that the *** exception was taken because deposits posted to the institution's general ledger are assessable. *** POSITION *** takes the position that its preissued, postdated cashier's checks are not assessable deposits. § 3-510, Official Comment 2 ("the following reasons for refusal are not evidence of dishonor, but of justifiable refusal to pay or accept: . Finally, a preissued, postdated cashier's check is not a "money order". In summary, the only definition of "deposit" relevant to *** preissued, postdated cashier's checks is found at subsection 3 ()(4).

A judge might have to see whether the checks given in evidence bear sequential serial numbers, or appear to have been written at the same time. Special rules apply if a check postdated by more than five days is given to a debt collection agency or a creditor who regularly collects its own debts.

The payee must give notice to the check writer at least three days, but not more than ten days, prior to depositing.

If *** failed before the payment date of these preissued, postdated cashier's checks, the rights of the payees would be frozen as of the failure date. Finally, not even *** practice of prematurely honoring these drafts would enable the payees to prematurely collect from the FDIC.

Even if a "course of dealing" relationship were deemed to accelerate payment, such an "agreement" would be unenforceable against the FDIC because there is no written agreement that *** will prematurely pay on these drafts.

In the FDIC deposit assessment audit of December 1986, the FDIC took exception to the pension pay service fund, account no. Furthermore, the FDIC included *** preissued, postdated cashier's checks in the assessment base.

In light of *** protest of this assessment, you asked whether or not preissued, postdated cashier's checks are assessable where they are posted to the bank's general ledger on the release date. THE FDIC's POSITION The FDIC's argument essentially is that these preissued, postdated cashier's checks are deposits, and they consequently are assessable. In addition, the payees of *** postdated cashier's checks are on notice that the instruments are not negotiable until the due date. Furthermore, and unlike a preissued, postdated cashier's check, a money order is an effective obligation without restriction on the payment date.

[Table of Contents] [Previous Page] [Next Page] [Search] Inclusion of Preissued, Postdated Cashier's Checks in FDIC Deposit Assessment FDIC-87-58 December 4, 1987 Richard T.

Miller, Attorney This memorandum responds to a deposit assessment protest submitted by *** of the ***.

*** has no significance for assessment purposes because a cash management relationship exists between this account and the current outstanding checks, account no. First, do preissued, postdated cashier's checks meet the definition of "deposit"? SUMMARY CONCLUSIONS *** preissued, postdated cashier's checks do not meet the definition of "deposit" until their due date. Preissued, postdated cashier's checks do not meet the definition of "deposit" until their due date. In addition, a preissued, postdated cashier's check is not an "outstanding draft" for purposes of what is a "deposit". Finally, since preissued, postdated cashier's checks are not deposits until their due date, *** pension pay service fund, account no ***, is not a deposit account.

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