With monthly U.S. Social Security Checks about to arrive, many Americans in Israel are wondering how to cash their dollar checks in Israel. Since the beginning of October 2013, a regulatory clampdown in the United States has closed off many Israeli money changers’ ability to process American checks.
The main reason for this is the compliance regulations to prevent money laundering and tax evasion that have become increasingly onerous in recent years, making it more difficult and costly for banks to process checks for people who were not their customers. It seems that most Israeli money changers were actually processing checks through one American financial institution, who were warned by the U.S. regulator that they were exceeding their mandate by processing these checks. That institution withdrew from the market on very short notice earlier this month. Only a handful of money changers with other banking relationships were able to continue processing checks. This problem is now affecting individuals living in Israel who receive $US dollar checks from friends and family, employment or social security, or who want to cash checks on their U.S. bank accounts in Israel.
In Israel, the banks charge high fees for converting your currency to Israeli shekels. They make their profit by charging retail rates that are less than competitive – often much lower than the exchange rates that you see listed – and charging additional conversion fees on top.
If you take an overseas bank check to your Israeli bank, they may charge you hefty fees and it can take up to 4 weeks for the money to reach your account. Banks have a habit of making things more complicated to confuse their customers, and it is not uncommon for unexpected transaction fees to be deducted from your account at the end of the month.
So what should you do if you are holding an American dollar check in your hand? Firstly, you should be wary of any service that offers to process your check electronically. The bank account on which the check is drawn will be debited by the money changer, and you will have limited control over the transaction, unlike cashing a check for the exact amount that is written on the face of the check, which involves no risk.
You need to choose a reliable money changer who declares all fees and charges up front and offers you a rate that is competitive against the inter-bank Shaar HaMischar wholesale rate as the independent reference point (see here for an explanation of the different exchange rates), so that you know exactly what your check is worth. You may decide to hold it for a week and see if the rate improves – no one can predict which way the shekel is moving against the dollar these days – but that choice is yours.
Montrose Change is proud that, throughout this difficult period, it has continued to offer a reliable and professional currency exchange service to all our clients, including processing American dollar checks at competitive rates. You can opt to receive its value in cash, or the funds can be transferred directly into your Israeli bank account at no extra charge. Call us today to check the day’s rate, which includes all fees and charges.
We look forward to serving you.