Conference 7.286::dcu

You aren't a forger, but take someone else who IS one.  THEN, would DCU be
liable for the loss?

Have you re-checked with the bank to see if they would still accept that check?
If so, ask them about the fed requiring both signatures be checked.  If they
still say they would accept the check, I'd look for a new bank.  I would cer-
tainly not like a bank NOT making sure ALL signatures were genuine before issu-
ing cash when a check is written to me and any other family member.

Your wife can be a (non-active) joint member in the same account with you.  It
would only take a moment for her to sign the signature card, and then your pro-
blem would be solved.

    NO, it wouldn't take a moment, as she's never anywhere near DCU.
    
    In fact, there are a few alternatives, none of which result in
    liability to DCU.
    
    1) Check and signatures are valid.  Fed accepts check.  No problem.
    
    2) Check is forged.  Then Fed rejects, signatures don't matter, but I
    go to jail.
    
    3)  Check is valid, indorsements aren't.  In that case, if the Feds
    have a question, they have the signatures on file from the 1040.  They
    can then return the check to DCU uncollected.
    
    Now if DCU were John's No-Questions Asked Check Cashing Service, they'd
    be stuck.  But I'm a long-term member, with direct deposit, a loan 
    history, etc.  I'm not a stranger.  Like any other bad check, they can
    still treat it as uncollectable and get it back from me.
    
    So I repeat.  They're treating me like a crook.
    
    Note that if what you said were true, then "and" checks would only be
    depositable into joint accounts.  Of course that's not true; I
    deposited an "and" check into a personal account last week.  At a real
    (customer-oriented) bank.

    What do you people do with regular endorsed cheques ...
    
    A writes cheque to B
    
    B endorses cheque (either open endorsement or closed to C)
    
    C then tries to deposit / cash the cheque
    
    
    In this instance the bank has no way of knowing whether the cheque
    was endorsed legally, so the joint payable cheques are certainly a
    lot better risk ...

�    NO, it wouldn't take a moment, as she's never anywhere near DCU.
    
    You're right, it's not a moment.  It's about 24 hours and 2 trips to
    the DCU.  Pick up a card from DCU.  Take it home.  Have you and your
    wife fill it out and sign it.  Drop off the card at DCU the next day. 
    I'm surprised more people don't have joint accounts with the hassels
    that can occur trying to get money out of that account should something
    happen to the account owner.
    
�    Note that if what you said were true, then "and" checks would only be
�    depositable into joint accounts.  Of course that's not true; I
�    deposited an "and" check into a personal account last week.  At a real
�    (customer-oriented) bank.
    
    "And" checks do have to be signed by both parties.  I've had to take a
    few checks back home for my wife to endorse them because I didn't
    realize at the time that it was made out to both of us.  
    
    There apparently is a difference between normal "and" checks and those
    issued by the U.S. Treasury.  I deposited our IRS refund today.  This
    was the first time I was asked by a teller if my wife was on the
    account.  Others are deposited or cashed no questions asked.  The only
    other time I've been asked if she was on the account was when I
    deposited checks made out to her with only her signature as the
    endorsement.

    re:.4
    I think you missed my point.  I agree that "and" checks require both
    signatures:  That's the difference between an "and" check and an "or"
    check; see Uniform Commercial Code 9.  And the check did have both
    signatures!  They could only _verify_ one.  So if the check were
    stolen, or something, they couldn't prove I didn't forge the other sig.
    
    I did get a callback from somebody who works with Chuck.  Her answer is
    that after Chuck spoke to me, she told him that _other credit unions_
    have this policy, so DCU should keep it.  Hey, that's Policy, don't ask
    why, it's laid out by invisible forces and the president can't change
    it, etc., etc.  Grace Hopper immediately came to mind!  "We always do
    it this way!"  That's the instant recipe for failure!
    
    Frankly I don't care about other CUs.  If I wanted to borrow a few mil
    to speculate on land, they'd be a lot easier on me!
    
    The rationale is that they had a problem once with this.  Now I don't
    know why, but if I submit a mis-endorsed check, it's rubber, and I'm
    guilty.  If the co-signature were void because of a divorce (which she
    mentioned could be a reason), then it would still be on file, and it
    wouldn't be caught!  It's a non-solution to a non-problem.
    
    And "two trips to Maynard" is NOT an easy thing for some non-DECchies. 
    We don't all live around here, y'know.  Just to deposit one $%^&* check
    a year?  No thanks.  LOTS of banks have better customers service! 
    Besides, if I wanted it to be a joint account, I would have made it
    one.  (That's at another bank.  A real one.)

�    I think you missed my point.  I agree that "and" checks require both
�    signatures:  That's the difference between an "and" check and an "or"
�    check; 
    
    I think you missed MY point which was that apparantly a U.S. Treasury
    Check is different from any other check, and this difference may be
    something that is out of the financial institution's hands.
    
�    And "two trips to Maynard" is NOT an easy thing for some non-DECchies. 
    
    My wife, a non-DECcie never had to make a trip to Maynard except when I
    closed on a mortgage.  I dropped the signature cards off at the DCU
    branch in HLO where I work.

    No, you miss my point!  Treasury checks are only _slightly_ different: 
    They have an explicit six-month time for payment to be refused on
    grounds of forgery.  Other checks have somewhat less time, though
    without UCC9 handy I'm not sure how long.  If I get back my
    cancelled checks (another reason I don't use DCU for checking) and I am
    suspicious that one went astray, I can use a forged indorsement as a
    grounds to get it back.  (The details of course get complicated here.)
    
    In any case, DCU's Policy, which was just re-affirmed on the phone five
    minutes ago, simply assumes the worst of its membership. 

    
    RE: .0
    
    Fred, I had to call DCU HQ back for other business so I thought I'd
    inquire about this situation while I was at it.  I am expecting a call
    back either today (not much left though) or tomorrow morning.  I will
    post what I find out.  I'd like to know what the risks are to both DCU
    and the membership.  From the brief discussion I had, it appears IRS
    checks are returned for reasons dealing with the signature on a regular
    basis.
    
    I hear what you are saying though and want to find out the rest of the
    details. 
    
    Phil

    re: -.1
    
    Now, this kind of response from a BoD member has GOT to make you feel
    good!  IMO, you guys are off to a good start!  :)
    
    Steve

    re: .9
    
    Just a note of concern (caution, what have you)...
    
    I do hope that the new BoD members are not going to begin involving
    themselves in the operational aspects of DCU.  I would hate to see the
    responsiveness of some of the new BoD members used as an excuse to ask
    questions in this notesfile as an alternative to picking up the phone
    and asking the question yourself.  The BoD should *NOT* be involved in
    daily DCU operations.
    
    I hope to see a reasonable balance displayed by the new BoD members.
    
    Dick.

re .10:  When a problem reaches Chuck's level and the customer still isn't
satisfied, I think it's appropriate for the Board to consider stepping in.
Then if the Board agrees with Chuck, they take the dispute off Chuck's
hands and the member is mad at the Board instead of at Chuck.  Or if the
Board disagrees with Chuck, the problem gets resolved and we don't end up
with a whole bunch of disaffected members.  Either way, I see that it can
be a positive thing for the Board to step in *if and only if* the usual 
channels for problem solving haven't worked.  Certainly, they shoudln't
meddle with day-to-day operations.a

re .4 or so:  Like the DCU, my bank let me bring home the signature card 
to have my wife sign it.  As a result they have no proof that the signature
on the card is actually my wife's!  If I wanted to commit fraud with a joint
signature check, I could bring in a fraudulent signature card for them to 
verify against the fraudulent signature on the check.  So I don't see that
having a signature card on file is a genuine protection, although I
suppose it may provide legal protection.

	Enjoy,
	Larry

    Phil, thanks for checking this out.
    
    I for one hope the BOD members DO step in with "policy" matters.  While
    they shouldn't be micro-managing _how_ DCU staff operates, who but the
    BOD should be ultimately responsible for policy?  And this is a policy
    issue.
    
    I'm sure the government returns checks, but that's hardly unique. 
    There has to be some kind of reasonable policy that allows members to
    be served without taking extreme risks.  Hey, they can call it an
    interest-free 6-month loan if they want, in case it gets returned. But
    then that's sort of the way all checks should be treated! 

re:  concerns about BOD and daily operations...

I didn't hear Phil saying, "I'll step in."  What I thought he said was
that he'd ask about it when he talked to DCU folks next.

I agree with Dick Mumford...would hate to see the BoD spending all their
time micromanaging the credit union.  But here is a case where a board
member can do some good:  The customer is clearly frustrated and unhappy,
DCU is giving mixed signals, and an explanation might go a long way to
help increase levels of understanding - even if the result is that the 
policy doesn't change.

Board members have access that the rest of us don't have.  While every
issue can't be a "get the board involved" issue, it is reassuring to know
that for significant concerns, there are board members willing to carry
those concerns to DCU.

./chris

>    Fred, I had to call DCU HQ back for other business so I thought I'd
>    inquire about this situation while I was at it.  I am expecting a call
>    back either today (not much left though) or tomorrow morning.  I will
>    post what I find out.  I'd like to know what the risks are to both DCU
>    and the membership.  From the brief discussion I had, it appears IRS
>    checks are returned for reasons dealing with the signature on a regular
>    basis.


BRAVO!!! BRAVO!!!

Chuck screwed up.  It is nice to see someone who can TALK to Chuck without
having to jump in his car, to find out what is going on.  Chuck said he would
do something and did not.  He feels he has a good reason, but he never passed 
this information back to the members.  Next time a member tries to do what
the president said he would be able to do, he gets the old, 'DCU does
not do that'.

I would EXPECT the BOD to get involved with a problem like this.  This is not
micro management but helping a member who was told one thing by the prez
and something else happens!

	- mark

.14>  I would EXPECT the BOD to get involved with a problem like this.  This
.14>  is not micro management but helping a member who was told one thing by
.14>  the prez and something else happens!


Same here.  And in the general case, it's also possible that the prez could
think something has been taken care of, but that the ball gets dropped on
the way back to the membership.  So it's appropriate and it's a service to
everyone, Chuck not least, that Board members take an interest in
communications.

    	... particularly when communications were a major problem with the
    old BoD and the new BoD (all 7 of them) ran on a platform of improving
    them.

    
    Well, I got unexpectedly detained at DECWORLD all day today so I wasn't
    in my office to take the return phone call.  I *did* receive a call back. 
    I have another stint in the morning but should be able to get some info
    by tomorrow afternoon.
    
    I have no intention of getting involved with day-to-day operational
    issues or problems.  However there are many things which we all need to
    understand more about.  I'm sure there are at least two sides to this
    particular situation.  I'm trying to get information and understand
    both sides to see if it makes sense as is, could be improved in some
    way, or is a candidate for elimination.  I'm not a big believer in
    "because everybody else does it this way" and "we've always done it
    this way".  A policy must stand on its own merits and all policies need
    to be reviewed as times and circumstances change.
    
    There are a lot of DCU members who may also encounter this very
    situation with IRS refunds.  Is it reasonable for DCU to refuse these
    deposits while the competition accepts them?  What are the 
    legal and monetary risks to DCU?  If the check is on hold for x days,
    is there risk to DCU?  Let's see what the answers are and go from
    there.  No promises to do anything except to examine what is being done
    to see if it all makes sense.  IMO, a lot of things like this should be
    reviewed.  These 'policies' affect all DCU members every day.  I want
    to make sure that "conservative fiscal policy" does not translate into 
    "unreasonable policies".
    
    

    Are policies like this written down or are they carried around in the
    minds of the DCU employees?
    
    If they are written down, can the complete list be made available?
    
    If they are not written down, should they be codified?

    Thanks for changing the title of this note!  Whew...
    

    
    OK, here is the story.  As usual, it'll boil down to a judgement call
    on each person's part on what is reasonable risk and what is not.  This
    is a common, recurring question/problem at this time of year.  Next
    year DCU will be alerting the membership to its policies in this area
    and how to avoid problems with cashing and depositing these checks.
    
    The situation is IRS checks with two signatures, attempting to be deposited
    into a non-joint account.  The reality of the situation is that the IRS
    can, and does, come back to DCU for money on these types of checks (up
    to 3 years I have been told).  The most common scenario is joint IRS
    returns (and checks) for people who are seperated or in the process of 
    divorce.  If DCU cashes that check without being able to verify that
    signature then they are liable for the amount in question.  Considering
    the large sums involved, the potential for loss could be substantial. 
    DCU isn't calling anybody a forger, implying wrongdoing, etc.  They
    just don't know what your personal sitaution may be.  If there WAS a
    joint signature on the account and it wasn't removed, then DCU still
    has a reasonable defense against having to possibly absorb the loss.
    
    Don't shoot me, I'm just the messenger.  Do people think it is
    reasonable to take these risks?  What if the IRS hits DCU for $2000 and
    the member has closed his account?  Let's here some more discussion on
    this.
    

    I think it's reasonable for DCU to take these "risks" IF they have
    taken other precautions.
    
    For example, they could only do it if the depositor-signatory is a
    member with an established record -- say, has been a member for some
    months, to verify that they're not scamming.  Or they could cover the
    check as an interest-free "loan", again on behalf of a member.  Or they
    could require the member to sign a separate statement indemnifying DCU
    against the claim, as a civil claim, in addition to the felony charge
    of check fraud against IRS which would apply.
    
    Given the _real_ losses they've had from _real_ fraud, this one ranks
    right up there with blue star LSD as a huge risk.

    Another opinion....
    - if the check has 2 names, it needs 2 signatures.

    - DCU should verify both signatures

    - The '2nd signature' should be verified by a 'signature card'.  These
      could be mailed to the members address to obtain the 2nd signature
      prior to deposit.

    Clearly the 2nd signature could be forged, but at that point I think
    DCU has covered itself.

    I agree that fore-warning the members next year would be a great idea,
    especially that they might need a sig card for the account prior to
    deposit.
    bob

Hmm... it sounds like the DEPOSITOR's good standing does not reduce the 
DCU's risk -- it is the depositor's SPOUSE who could cause DCU trouble.
I presume that what has actually happened when the IRS demands money back
is that the spouse has told the IRS that his/her share of the tax refund 
was misappropriated by the person who deposited the check, so that the IRS
responds by asking the bank/CU if they checked the signature, and if they
didn't, the bank/CU is liable for the money.  Is that accurate, Phil?

If the above is correct, then I think the DCU is right to not cash those
checks, unless the spouse also has an account at the DCU (joint or separate), 
so that a signature card is on file to verify the signature.  

On the other hand, can't the DCU stick me for the money if the IRS returns
a check?  If they can, then my being a good credit risk (and having been a
member a long time) does indeed reduce the risk.  If they can't, or if they
would have to sue for it, then I can really see why the DCU woultn't want
to get involved in that kind of situation.

How do banks handle this case?  It's never been a problem for me since all
of my accounts are joint -- that way, if one of us dies, the other retains
use of all of our liquid assets without probate or legal messiness.  

	Enjoy,
	Larry

>Hmm... it sounds like the DEPOSITOR's good standing does not reduce the 
>DCU's risk -- it is the depositor's SPOUSE who could cause DCU trouble.
    
    Exactly.
    
>I presume that what has actually happened when the IRS demands money back
>is that the spouse has told the IRS that his/her share of the tax refund 
>was misappropriated by the person who deposited the check, so that the IRS
>responds by asking the bank/CU if they checked the signature, and if they
>didn't, the bank/CU is liable for the money.  Is that accurate, Phil?
>
    >If the above is correct, then I think the DCU is right to not cash those
>checks, unless the spouse also has an account at the DCU (joint or separate), 
>so that a signature card is on file to verify the signature.  

    Basically.  The IRS grabs it from DCU's accounts.  DCU must then
    chase somebody for it.  But if they have checked the signature with the
    one on file, then the claim of misappropriation will most likely be
    disallowed. 

>On the other hand, can't the DCU stick me for the money if the IRS returns
>a check?  If they can, then my being a good credit risk (and having been a
>member a long time) does indeed reduce the risk.  If they can't, or if they
>would have to sue for it, then I can really see why the DCU woultn't want
>to get involved in that kind of situation.
    
    I don't believe IRS returns the entire check.  Also, remember there
    could be a long time period involved here.

>How do banks handle this case?  It's never been a problem for me since all
>of my accounts are joint -- that way, if one of us dies, the other retains
>use of all of our liquid assets without probate or legal messiness.  
    
    The person who described this to me indicated this was also a problem
    with banks and is not a CU problem.  Out of curiosity, did .0 finally
    cash this check at a bank where both names were on the account or both
    signatures were on file?
    
    The potentially long length of time that DCU would be at risk, the
    potentially large sums involved, and the great unknown of the
    member's personal relationship with the other person on the check seem
    to combine to make this a very difficult situation for everybody.

    Last year, I had a similar problem of depositing IRS refund check in DCU. I
    finally decided to deposit my modest check in Discover Savings Account and
    in return I got $10.00 extra rebate. Note that with Discover, I didn't
    even have a joint account but they still accepted the refund check as long
    as it was signed by my wife and me.
    
    Well, my money stayed at Discover till DCU threaten to impose fee 
    for the checking accounts. When DCU follows very strict rules and
    aren't flexible to customers, customers simply deposit their checks
    else and hence DCU 'loses' deposits.
    
    Abhijit     
    

    In 1991, I took the check to my bank and deposited it in my personal
    checking account, without problem.
    
    In 1992, after Chuck had told me that he would not refuse my check
    again, I posted .0 and simultaneously called Chuck.  Eventually, his
    hangers-on (I never reached Chuck personally) decided that since I had
    made a stink and they were aware that he had personally told _me_ to my
    face that he _would_ accept my check, they "made an exception" and
    accepted the check.  Once.
    
    By next year, I'm supposed to remember NOT to confuse DCU with my bank. 
    I'll just have to bring the check to the bank and not use DCU.
    
    Remember, if I were to forge a spousal signature, I'd be committing a
    felony -- it says so right there on the check.  And the CU could sue me
    too.  That's not much different from any other check.  And I susepct
    that other checks could be "bounced" late, if for example the
    originating account had turned out to have had stolen checks (and thus
    a bum signature on the front).  However in some such cases the other
    bank eats it.

I've battled DCU over this very issue for the past four years. I understand
there's a *potential for loss* and a lot of *ifs* involved. However, I would
like to know:

     o Just how many IRS checks were returned last year? 
     o The previous 3 years? 
     o How much money was at issue last year? 
     o The 3 years before? 
     o How much was recovered from the responsible members? 

DCU does *not* have the same risks as do banks whose members walk in off the 
street. They serve employees of a stable, balanced company who tend themselves
to have stable employment and balanced finances (witness loan default rates).  
I resent it when DCU acts as if we did just walk in off the street.

/jan

    
    I will try and find out the real facts around the history of
    bad/returned checks.  I think it does make a difference in this case. 
    I don't think DCU, or anybody for that matter, should only be using
    the potential for negative results when establishing policy.  If the
    history of the membership indicates that there are one or two of these
    returned a year, then this policy may warrant a complete review.
    
    But the final decision usually boils down to a judgement call on what
    is too risky and how much loss is "acceptable".  I think the real
    numbers should be used to explain the policies in place at DCU.  Then
    people will know that the policies aren't just pulled out of thin air.

    The number of returned checks really won't tell you anything.  You
    won't be able to separate the effectiveness of DCU/Government policy
    from the "trustyworthiness" of members.  It would be nice to find out
    how many times this does occur (member tries to deposit a joint IRS
    check in a non-joint account), but I'm sure that would be just as
    difficult.
    
    As someone who has been burned by an improper check cashing, I'm glad
    to see proper precautions in place.

    What I don't understand is why the bank/CU is liable for a check on
    which one signature has been forged. Wouldn't the IRS have a lot more
    fun and income from going after the forger?
    

    The IRS might have more fun going after the forger, but it wouldn't
    have its money.  The IRS does understand its goals (independent of
    whether you or I agree with those goals or the methods of achieving
    them).

    The IRS can, of course, go after the forger; the check warns of up to
    ten years of federal hospitality for forgery on its checks.  But they
    can of course first ask the depository (?) bank for the money; in that
    case, the bank can sue the forger.  If the forger's caught, of course,
    the bank has several years in which it knows right where the forger
    will be, down to the cell number....
    
    Compared to other risks that a financial institution takes (like real
    estate loans, even honest ones), this seems pretty minor to me.

I have a similar situation, which I never before understood:

My wife's formal (married) name is "Mary Kristine Kyzivat", but she prefers
to be known as "Kristine Kyzivat", so that is how she is known to DCU, both
on a personal account and a joint account.

In various situations she is still known by her formal name, such as to the
IRS.  Therefore, from time to time she receives checks made out to that
name or we get checks made out jointly to me and to her formal name.  The
DCU sometimes asks about these, though I am not certain how consistent they
are in doing so.  (This never made any sense to me since third party checks
are normally accepted.)  I don't recall that a deposit has ever been
actually refused, but this may have something to do with the relative
uniqueness of the names involved.

Surely others have this sort of problem.  What ARE you supposed to do if
the name on the IRS check is different than the name on the account?  Is
the IRS effectively REQUIRING people to have a bank account in the same
name that they use to file their income tax?

	Paul

    Re .33:

>   Surely others have this sort of problem.  What ARE you supposed to do if
>   the name on the IRS check is different than the name on the account?  Is
>   the IRS effectively REQUIRING people to have a bank account in the same
>   name that they use to file their income tax?
    
    The IRS and DCU want the endorsement to be technically correct.  The
    Uniform Commercial Code provides the answer here.  You and your wife
    should first endorse the check using the names to which the check was
    made out.  She should follow her signature with her CORRECT signature,
    as if the IRS had mis-spelled her name.  The DCU is within its rights
    to require both her ("as written" and "correct") signatures.  By doing
    so, DCU is off the hook with regard to proper endorsement.

�She should follow her signature with her CORRECT signature,
�    as if the IRS had mis-spelled her name.  
    
    People misspell my last name all the time.  I've always wondered how
    this was supposed to be handled.  I haven't had a problem cashing any
    of these yet, though.

>    The IRS and DCU want the endorsement to be technically correct.  The
>    Uniform Commercial Code provides the answer here.  You and your wife
>    should first endorse the check using the names to which the check was
>    made out.  She should follow her signature with her CORRECT signature,
>    as if the IRS had mis-spelled her name.  The DCU is within its rights
>    to require both her ("as written" and "correct") signatures.  By doing
>    so, DCU is off the hook with regard to proper endorsement.

What is meant here by CORRECT?  Both forms are correct in different
contexts.  The IRS knows her one way and the DCU knows her another way.

As far as the DCU is concerned, these COULD be two separate people.  If so,
it seems like they would want to verify ALL the signatures.  If they don't,
I presume it is because they can verify some of them, and that at least
gives them someone to go after for the money.  But they have someone to go
after even if they only verify one signature.

The whole thing makes very little sense to me.

	Paul

.36> >The DCU is within its rights
.36> >to require both her ("as written" and "correct") signatures.  By doing
.36> >so, DCU is off the hook with regard to proper endorsement.

.36> What is meant here by CORRECT?  Both forms are correct in different
.36> contexts.  The IRS knows her one way and the DCU knows her another way.

Not so.  The reference he makes is 'as written', not 'IRS correct'.  The
correct name/signature is technically on file with DCU, NOT the IRS.  My
source?  My wife used to be a teller, and this IS the way it is done.

.36> As far as the DCU is concerned, these COULD be two separate people.

AND live at the same address AND have only CLOSELY similar names?  Nope.