This makes sense. I think it is the cashing all the checks part that is what is to be avoided.
There is so much on the applications that can be verified prior to cashing a check! The cashing of the check is basically to determine if what they said is really true and to see how much debt is surrounding an applicant.
With my pre qualify letter I screen out anyone who's income or credit is below my criteria so that way there is not disappointment or wasted time and money.
Colorado has no laws that i can find on this subject just that you treat each applicant the same.