The Patriot Act

• In 2003, the Patriot Act identification requirements took effect in the United States. The Act requires financial institutions to collect ID from individuals opening new accounts or sending wire transfers. It does not cover check cashing but many financial institutions use the ID requirements listed in the Act for new accounts as the basis of check cashing ID rules. The Patriot Act defines valid ID as government issued and featuring the name and date of birth of the person presenting it. The Act also requires people to provide Social Security numbers when opening accounts and many banks require people cashing checks to produce a Social Security card as a second form of ID.
  
  

Other Requirements

• Many financial institutions allow people cashing checks to use student ID cards, work IDs or credit cards as secondary forms of ID. Thumbprint signatures are often taken as an extra precaution and some check cashing centers use biometric scans. Due to high volumes of check fraud, some institutions call customers to verify checks before cashing checks presented with their signatures by non-customers. Legally, banks do not have to cash checks for non-customers and some refuse to do so.
  
  

Currency Transaction Reports

• The 1970, Bank Secrecy Act requires financial institutions to complete Currency Transaction Reports when individuals conduct cash transactions totaling more than $10,000 within a 24-hour time period. Anyone cashing checks in excess of that amount must provide the check cashing center or bank with government issued ID, a Social Security number and physical address. Additionally, the BSA requires financial institutions to ask the customer about the origin of the money and details of any other party that stands to benefit from the transaction.
  
  

Exceptions To ID Requirements

• Many banks waive ID requirements for both customers and non-customers who cash checks for $100 or less. Some banks believe that waving ID requirements speeds up transaction times and raises customer satisfaction levels. Losses incurred due to fraudulent transactions are offset by profits made from satisfied customers. Most banks also allow branch employees to use their discretion and allow known customers to cash checks without having to produce valid ID. Some customers are even exempt from Currency Transaction Report requirements if the nature of their business necessitates frequent large cash withdrawals.