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Re: [OM] [OT] Money Orders and Credit Unions

Subject: Re: [OM] [OT] Money Orders and Credit Unions
From: Garth Wood <garth@xxxxxxxxxxxxxxx>
Date: Wed, 29 Nov 2000 10:01:25 -0700
At 09:02 AM 11/29/2000 -0700, Chris O'Neill wrote:
>I recently purchased a T20 flash from a US seller, and send the seller an
>international money order in US$ drawn from one of the biggest banks in
>Canada (Royal Bank).  Last night, the seller advised me that his credit
>union won't deposit the money order into his account unless he pays a US$10
>fee of some sort.  Their reaason for demanding the fee is because it is not
>drawn on a US Bank.  Since the money order is only for US$20 and change,
>he's understandably not interested in paying a 50 0.000000ee to get it into his
>account.

Actually, Royal Bank is *the* biggest bank in Canada, and could purchase a 
significant fraction of all the "Mom 'n Pop" banks in the U.S., should they 
wish to do so.

Money orders written by Canadian banks in U.S. funds *must be* drawn on a U.S. 
bank.  For example, all money orders in U.S. funds written by TD Bank are 
actually drawn on a U.S. bank in Ohio (NatWest, I b'lieve).  There's no way for 
a Canadian bank to "natively" create a money order in U.S. funds -- it's done 
by a clearing transaction, previously negotiated with a U.S. bank.  The credit 
union's got its head shoved up its posterior, if you ask me.

>My questions are:
>
>1.  Is this standard operating practice for credit unions in the States? 
>I've personally never heard of such nonsense for money orders.  Some
>financial institutions will "hold the funds" on personal cheques until the
>cheque clears, but I've always thought money orders were as good as cash
>when endorsed in the presence of a teller, and the only "requirement" might
>be having to present ID.

I've run into this, too.  I think it's bogus -- just another example of lazy 
banks/credit unions wanting to hold your money as long as possible before 
dealing with it.  A friend of mine who works for Bank of Montreal as a large 
accounts manager says that, in Canada at least, domestic cheques and money 
orders *always* clear overnight, and a money order represents funds which have 
*already* been withdrawn and certified (just like a certified cheque).  I can't 
imagine how, in the largest capitalist economy in the world, it would be any 
different (or any less efficient).

>2.  Any suggestions on how the seller can cash this?
>
>I'm sure some would prefer OFF-LIST replies to mailto:coneill@xxxxxxxxxxx
>to keep the list traffic down.  Thanks, in advance, for any assistance you
>can provide.

My personal style (abrasive, to say the least, when I'm confronted with such 
idiocy) is to hammer home a nuclear strike, but you might suggest to the seller 
that he send the M.O. back, and you'll send him $21.00 in U.S. notes.  I've had 
to do this several times when U.S. counterparts have been suspicious of "them 
funny furiner money orders."  Then you have to eat the cost of actually having 
negotiated the money order.  Sorry.  :-/

Garth


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