Fast Offering check not clearing because vendor electronically deposits the check?

For a few years now, it seams that some Welfare Fast Offering checks do not clear on the vendor's side. The vendor then goes back to the member that received the Welfare Fast Offering check demanding immediate payment due to what they think is insufficient funds to cover the check. I find that the most common vendors are cell phone vendors, for example Verizon or AT&T.

I have been sending a letter using our Ward's letterhead explaining to the vendor that the check has sufficient funds and that they would need to physically deposit the check (not electronically deposit or e-deposit the check). I have checked at the Stake level, CHQ via MLS/CUBS message and other leaders. Everyone tells me that there is no explanation.

Last month I forgot to include my letter with a Fast Offering check to Verizon and the check did not clear the bank and it came back to them. Has anyone experienced this issue before? Has it been addressed in this forum? I have tried for hours researching this forum unsuccessfully.

When I cut the check in MLS/CUBS, I immediately send/receive changes. I feel like I am doing everything correctly. Do I need to continue to include my letter to all checks? If so, why is that not in the finance training or discussed on this forum? I need any input and suggestions. Thanks.

Interesting. In this day and age I don't think check are physically processed after they've reached the first bank. So I'm not sure why there would be a problem with e-deposit unless it's leaving out some critical information or it arrives at the church's bank before the data from MLS can get there.

If you get no better advice, I'd suggest calling Local Unit support. Make it clear the problem isn't just this last check, but a over all pattern and see if you can work you way to finding someone who can figure out where it's going wrong. If it's the church itself that's denying payment, then you'd think there would be a log to explain why it was denied.

RussellHltn wrote:Interesting. In this day and age I don't think check are physically processed after they've reached the first bank. So I'm not sure why there would be a problem with e-deposit unless it's leaving out some critical information or it arrives at the church's bank before the data from MLS can get there.

Church checks are corporate checks that require two signatures and cannot be processed electronically. The check must be presented to the bank for payment.

Therefore, Church checks will never clear through utility bill paying services at grocery stores, etc. They may still choose to accept them, but most will not.

A vendor cannot e-process a Church check. It must be deposited at the bank, the old-fashioned way. Most don't like that because they do not get their money as fast.

lajackson wrote:Church checks are corporate checks that require two signatures and cannot be processed electronically. The check must be presented to the bank for payment.

Therefore, Church checks will never clear through utility bill paying services at grocery stores, etc. They may still choose to accept them, but most will not.

A vendor cannot e-process a Church check. It must be deposited at the bank, the old-fashioned way. Most don't like that because they do not get their money as fast.

Very interesting. I wonder if this has anything to do with a handful of "outstanding" checks we have listed from last year payable to vendors, including landlords and utlility companies. But as far as I know, those bills were considered satisfied. In some cases, it is plausible that the fast-offering receipients never delivered the checks (written in advance for a doctor visit that perhaps never happened, etc.) But in the case of rent and utility checks, it's hard to believe these checks were not deposited, or there would have been consequences.

I do remember one case last year when a landlord issued an eviction notice in spite of a check we had issued more than a month before, and CHQ confirmed to me that the check had not cleared. We wrote a replacement check and were prepared to stop payment on the old one, but we weren't going to hand the new one over without talking to the landlord first. I visited the leasing office, persuaded them to open their records and look. They found our old checks (one for rent, one for utilities) uncashed and sitting in a drawer. But for most businesses, I think, such cases have to be rare. They do want the money and it is in their interest to deposit the checks.

It is often difficult to research outstanding checks with vendors. Because of their own privacy policies, they may only be willing to talk to their customer, not to us, even though we wrote the checks. For example, we now list an outstanding check to a doctor's office, and I fully expect they will refuse to talk to me about their patient's account because of HIPAA regulations.

BTW, in our area we have never had a problem with local bill-paying services accepting our checks. The dominant player here is a large regional grocery chain. We and our fast-offering recipients have often delivered checks to its over-the-counter business services, payable to different utilities. I also have never experienced the "insufficent funds" problem that the original poster reports, and we write a lot of checks to national vendors including those telecoms.

RussellHltn wrote:Interesting. In this day and age I don't think check are physically processed after they've reached the first bank. So I'm not sure why there would be a problem with e-deposit unless it's leaving out some critical information or it arrives at the church's bank before the data from MLS can get there.

To clarify further, the check has two authorized signatures. The memo has the correct information according to training: "Name / Utilities / Mar 11." I have heard that CHQ will deny a check if all information on the check is not there. In my case, all information is there and correct.

RossEvans wrote:In some cases, it is plausible that the fast-offering receipients never delivered the checks (written in advance for a doctor visit that perhaps never happened, etc.) But in the case of rent and utility checks, it's hard to believe these checks were not deposited, or there would have been consequences.

The check never delivered is a plausible explanation and would need to be researched further. The past few years, the Welfare Fast Offering recipient communicated to the Bishop and I that the vendor contacted them that the check did not clear the bank due to insufficient funds. Sometimes this would be a letter from the vendor or a new invoice with late fees and other fees due to a bounced check. I would then void the check out of MLS/CUBS and reissue a new check with my letter I created printed on the Ward's Church official letterhead and include with the new check hoping the vendor will physically deposit the new check.

lajackson wrote:Church checks are corporate checks that require two signatures and cannot be processed electronically. The check must be presented to the bank for payment.

Therefore, Church checks will never clear through utility bill paying services at grocery stores, etc. They may still choose to accept them, but most will not.

A vendor cannot e-process a Church check. It must be deposited at the bank, the old-fashioned way. Most don't like that because they do not get their money as fast.

@lajackson: You are stating that all Church checks must be physically deposited at the bank the old-fashion way. Why has the Church not explained and trained us through MLS/CUBS training, posts through this forum or messages sent through MLS/CUBS? Why is there no example or form letter that we could use to send with the checks to vendors?

I am frustrated because I had to figure this issue on my own. I would think with the seriousness of this issue and the controls the Church imposes on the check clearing process by physically depositing the check would be standard knowledge and training.

lajackson wrote:Church checks are corporate checks that require two signatures and cannot be processed electronically. The check must be presented to the bank for payment.

I did some googling.

While not definitive,

• It appears that business checking does work under different rules than consumer checking.
• There are different electronic payment systems. I've found reference to "Direct DDA Access", Automated Clearing House (ACH) Processing, and Check Replacement Document (CRD) Processing as separate things. The last one promising that it's able to do business checks.

As such, it's entirely possible that a vendor that would normally only process consumer checks may encounter some issues with trying to process a Church check depending on the capability of the processing system they use.

This is the letter that I print on my Ward's Church official letterhead and include with Fast Offering checks. I sign the letter and include my phone number.


To Whom It May Concern:

This check from The Church of Jesus Christ of Latter-day Saints on behalf of your customer needs to be physically deposited for it to clear the bank and for you to receive the funds. There are sufficient funds to cover this check as long as these directions are followed.

Please do not perform any e-deposit, e-file, or any form of electronic deposit; otherwise, this check will not clear and funds will not be received.

Thank you for your assistance and support in the Church’s check clearing and anti-fraud process. If you have additional questions, please call me.

thrust wrote:This is the letter that I print on my Ward's Church official letterhead and include with Fast Offering checks. I sign the letter and include my phone number.


To Whom It May Concern:

This check from The Church of Jesus Christ of Latter-day Saints on behalf of your customer needs to be physically deposited for it to clear the bank and for you to receive the funds. There are sufficient funds to cover this check as long as these directions are followed.

Please do not perform any e-deposit, e-file, or any form of electronic deposit; otherwise, this check will not clear and funds will not be received.

Thank you for your assistance and support in the Church’s check clearing and anti-fraud process. If you have additional questions, please call me.

I think CHQ needs to clarify and update CUBS training. CHQ should consider my letter as a good template and guidance to CUBS (unless I am wrong in my years of experience and CHQ not communicating and training me).

I also have thought about not including my phone number at the bottom of the letter, but instead put CHQ Finance phone number for the vendors to call since CHQ is making it very difficult for vendors to deposit F.O. checks.

thrust wrote:@lajackson: You are stating that all Church checks must be physically deposited at the bank the old-fashion way. Why has the Church not explained and trained us through MLS/CUBS training, posts through this forum or messages sent through MLS/CUBS? Why is there no example or form letter that we could use to send with the checks to vendors?

Because this is not your problem. Yes, it becomes your problem because those receiving and processing the check have not been trained. But those who process checks electronically should have been trained on the proper handling of a corporate check with two signatures. They are mishandling it when they try to e-process it, they are not following proper banking procedures, and their representatives have not been taught what to do to approve and clear the check.

The vendor still has the option to refuse the check, and they take that option at the first sign of a problem, rather than properly handling the situation so that a corporate check can be used.

thrust wrote:I also have thought about not including my phone number at the bottom of the letter, but instead put CHQ Finance phone number for the vendors to call since CHQ is making it very difficult for vendors to deposit F.O. checks.

I think your letter is good. I would use the phone number on the check and tell them if they have any questions to call that number.

And remember, the Church is not making it difficult for vendors to deposit FO checks. Vendors are not following standard banking procedures. Some have not made themselves aware of those procedures, but anyone in business should be. And a large corporation or utility should most certainly know how to handle the situation. Alas, they also have new folks at the gateway and do not train them sufficiently.

Thank you @lajackson. I never knew of the banking industry rule that if a check has two signatures that is cannot be electronically deposited, but rather physically deposit. Your explanation makes sense now. I googled a few searches to see if there was anything out there regarding not electronically depositing a check with two signatures. I did not find anything substantial. Is this a nationwide banking policy or CHQ Zion's Bank policy?

I am thinking of adding this information to my letter, but want to get clarification that it is a nationwide banking policy first.

Also, why hasn't CHQ explained this issue and/or trained us on this issue? This has been going on for years.

thrust wrote:Is this a nationwide banking policy or CHQ Zion's Bank policy?

Banking law is complex, governed by both state and federal laws, and way beyond the scope of this forum. If you are interested, start here.

Uniform Commercial Code Articles 3 and 4.
Federal Reserve Regulations J and CC.
Title 12 of the Code of Federal Regulations.

thrust wrote:Also, why hasn't CHQ explained this issue and/or trained us on this issue? This has been going on for years.

I think because ultimately the bank gets to decide what happens, and not the Church. The bank always has the option of refusing to accept the deposit of a check. This is true of my personal checking account, as well. And there is a whole 'nother set of rules when an agent accepts a check on behalf of another company, which then deposits the check into the company bank account.

As I said, banking law is complex, . . . [grin]

thrust wrote: Also, why hasn't CHQ explained this issue and/or trained us on this issue? This has been going on for years.

I have to wonder why, if this is a general problem, I have never encountered it. As finance clerk for a very large ward with a disproportionately large volume of fast-offering payments for several years, I have never experienced the symptoms you describe -- our checks to vendors bouncing for "insufficient funds." As I mention above, I have experienced several mysteriously "outstanding" checks, but that seems like a different case entirely.

thrust wrote:I never knew of the banking industry rule that if a check has two signatures that is cannot be electronically deposited, but rather physically deposit.

I think it's related, but not that specifically. Now that I think about it, I believe there are at least two 'electronic' systems. The first is the kind where you can set up automatic payments, or pay your credit card via a website, etc. It's a "data only" transaction.

The second includes a image of the check. That's how a check deposited at a bank would be processed.

I know that's how it shows on my own personal account. The category 1 items are "EFT" - Electronic Funds Transfer, while the second type actually shows me an image of the check and has a check number that came from my checkbook. I suspect the church does not honor the first kind, but only the second kind. They have to have an image of the check since wards are not authorized to do any kind of EFTs.

Payment systems that only OCR the check for the numbers to create the first kind of transaction will fail.

RossEvans wrote:I have to wonder why, if this is a general problem, I have never encountered it.

It's possible that the payment vendors in your area are more "with it" then thrust's, influenced in part by how many times they've had to accept a business check.

RussellHltn wrote:It's possible that the payment vendors in your area are more "with it" then thrust's, influenced in part by how many times they've had to accept a business check.

But I have made lots of payments to at least some of the same national cellphone vendors with whom thrust reports problems.

RossEvans wrote:But I have made lots of payments to at least some of the same national cellphone vendors with whom thrust reports problems.

I wonder where it's being processed. A big company-run store or some little independent? If it's mailed to the main office, I'd expect it to work. Go to a little kiosk, it could be dicey.

RussellHltn wrote:I wonder where it's being processed. A big company-run store or some little independent? If it's mailed to the main office, I'd expect it to work. Go to a little kiosk, it could be dicey.

That could be a factor. If we are paying a utility vendor (local or national) our preferred practice is to mail the check ourselves, together with the vendor's own "please return this portion with payment" stub, and to include the account number in the check memo line. But occasionally a recipient will need to take the check personally to a counter somewhere.

RossEvans wrote: If we are paying a utility vendor (local or national) our preferred practice is to mail the check ourselves, together with the vendor's own "please return this portion with payment" stub, and to include the account number in the check memo line. But occasionally a recipient will need to take the check personally to a counter somewhere.

In our area, most counter services will not accept the checks because they will not clear electronically, but we have never had a problem when we mail the check to the payment address. The bishop precedes the mailing with a phone call to customer service to inform them the payment is on the way. This usually keeps the service from being cut off for a few days of mail time.