UCC tricks and treats!

I hope everyone has a Halloween filled with more treats than tricks! Speaking of tricks, what happens when a credit union receives a check that has double the forgery? For example, the drawer’s signature AND the endorsement are both forged.

Generally, check transactions are governed by Article 4 of the Uniform Commercial Code (UCC), which is adopted individually, as state law. Please keep in mind that every state may have adopted a version of the UCC that differs from the Model UCC, so make sure you check your state’s laws before proceeding!  However, the information I am going to provide is based off the Model UCC.

Forged Drawer’s Signature

Under UCC § 4-401, if a check has a forged drawer’s signature, then the check is not properly payable. Specifically, UCC 4-302 provides that:

“If an item is presented to and received by a payor [credit union], the [credit union] is accountable for the amount of:


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