Which entity can issue checks that may be considered exempt from the Good Funds Law?

The answer is based on the provisions of the Good Funds Law, which regulates how funds are to be handled in real estate transactions in Missouri, particularly aiming to ensure that funds are secure and available before closing. In this context, financial institutions—including banks and credit unions—are considered reliable entities that can issue checks under this law.

Financial institutions have a regulatory framework that ensures the stability and availability of funds, making any checks they issue generally accepted as good funds. This means that when a check is drawn on a financial institution, it is deemed to have sufficient backing, reducing the risk of issues such as bounced checks or insufficient funds. Consequently, checks issued by these entities may be exempt from certain regulations stipulated by the Good Funds Law, allowing transactions to proceed without delay.

In contrast, checks from private corporations, non-governmental organizations, or personal lenders might not have the same level of assurance regarding available funds, leading to potential complications. Therefore, checks issued by these types of entities do not typically enjoy the same exemption under the Good Funds Law as those from recognized financial institutions.