4-401(c) has been adopted in every state because automated check processing systems (which are of course now universal) can’t handle postdated checks. From the official commentary of the UCC drafters:
No. A postdated check was a mere promissory note under the law as it existed prior to the adoption of UCC 4-401. In any event, absent evidence that the postdating was not contrary to the parties’ actual agreement, the penalty for honoring the check would be on the bank, not the depositor.
Note that the post you are responding to is 8 years old (we call these “zombie threads”). Since Balthisar hasn’t posted here since mid-December, you are probably not going to get a response.
Bolding mine. Unless the bank views the check as a document that says “pay this amount” which just happens to have a date (and possibly and address, some printed names and a memo field) to be useful reference for the payer and payee.
Did your bank tell you that they would also be the calendar police for you? Because mine didn’t. The only time my bank said that they would honor timing instructions from me is when I selected future pay dates in on-line instructions.
I would be pretty surprised if my bank wasted manpower examining every check for proper dates.
That would depend on what is meant by the ability to “handle” such checks. The systems are certainly capable of rejecting a post-dated check, the same way that they’d reject a check that was missing a signature, or where the dollar amount in words didn’t match the numerals.
I am not asking to be able to deposit a postdated check, and then have the bank hold it until the date arrives. That would be grossly unfair to the bank. I’m saying that they should honor the date by declaring the check to be not-yet-valid, and the teller should refuse to accept it (or, if the teller or ATM mistakenly accepts it, it should get rejected further down the line).
I have no idea what the first sentence means. What was the law prior to UCC 4-401, and how were such checks handled back then? How is a check nowadays different from a promissory note?
Re the second sentence: My point concerned the OP, who wrote that a postdated check is “a verbal agreement between the payor and payee”, meaning that the bank is not a party to the agreement, and that the payee who deposited it would have violated that agreement. In other words, if the presumption is that the payor and payee agreed that the payee would hold on to the check and not deposit it until the date written on it, and then the payee deposited it anyway, why do you say that the penalty would be on the bank?
I sure hope they examine every check to make sure that the dollar amounts match up, and that the check was signed.
I can easily understand that whether the signature matches the one on file is not easily automated, and would take a lot of manpower, but it is a simple matter to verify that some scribble is there. In fact, I recall once about 20 years ago, I deposited a check at my ATM, and found that it was not credited to my account as promptly as usual. When I inquired, they told me that the check had not been signed, and was in the mail on its way to me. It took several more days until I finally received it so that I could straighten it all out.
I opened this thread hoping to be able to participate based on my prior career in banking. Imagine my surprise to find I already did - 8 years ago!
I doubt very much that humans look at most checks anymore. You can deposit checks via camera phones these days so the check never goes to the bank at all. When I deposit checks at the ATM they no longer go into an envelope. You put them in one at a time and verify that the amount is correct. I would think that checks or the photos of checks are examined only for random quality control or if a customer reports a problem.
Sorry for not being clear. What I meant was that the computer systems look at the amount in numerals, and at the amount in words, and that the computer compares the two. If I’m not wrong about that, then why can’t the same computer system look at the date, and reject the check if the date is in the future?
The date is not the bank’s problem, it’s the depositor’s - if someone gives them a post-dated check, that’s an agreement between the check writer and the payee, and the payee is supposed to hold the check until the date. No one else is looking there. If the person writing the check is simply assuming the payee will agree to hold it (and they never ask because they know the answer will be no), well, what happens when you assume? Fees, penalties, and you make an ass of you and umption.
As said years ago when the thread started, the surest method of the check not clearing early is calling your bank and telling them not to accept it. Such items are flagged as “exceptions” and kicked back to the depositor when it hits your bank’s system, usually with a note saying why. That will stop you getting an overdraft, but the payee can still hit you with late fees or penalties, treating it like a bad check. And check processing is fast now - don’t assume you’ve got days to let them know they need to look out for it; you’ve got hours.
Even when humans were involved unsigned checks got processed. Sure, if I went to a teller or an ATM and deposited an unsigned check the teller would reject it. (and there would be a be a teller or equivalent involved in those days even with an ATM) But not if the electric company did it. Companies that took a lot of checks would stamp an unsigned check "absence of endorsement guaranteed " and it went right through, sometimes even if a particular unsigned check wasn’t stamped. Similarly, banks didn’t care if the amounts matched up. If they didn’t match, the amount written in words took precedence. Most people aren’t going to want the accidentally unsigned check they sent to the electric company returned to them, and they aren’t going to want the check that says “one hundred dollars” in words returned because they wrote 100 in the numeral section instead of 100.00 . If the banks weren’t that worried about signatures and matching amounts when humans were involved, they’re not going to design computer systems that look for those issues.
Computers can figure out digits OK, but interpreting handwriting is much harder. Think about CAPTCHA systems, which keep computers out because they can’t read messy but printed text. Handwriting is harder still.
The automated systems don’t care about the written-out amount or the date. They might check to see if there’s *something *there (and likewise for the signature and payee) but that’s it. A human would have to check the rest (and perhaps does for a small number of checks).
Couple of years ago payroll gave us our checks early because of a holiday, but the checks had been printed with the regular pay date later in the week. The teller at my Credit Union said they shouldn’t really cash it, but they did because I was a regular customer.