"Patrygoddess: Uhm no, the only way for her to deposit the check would have been for HER HUSBAND to sign it before she deposited the check to the joint account. You are not allowed to endorse a check not made to you even if it's going into an account owned by both you and the payee."
That's not accurate. The deposited check must be endorsed, but endorsement by proxy is perfectly acceptable and therefore if her DH said that she could endorse the check for him, then her endorsement is enough to pass regulation. A bank can (and often will) refuse to accept an endorsement by proxy without backing documentation, but there's no law prohibiting it. So, once the bank rep told her that she could endorse his check and deposit it, and then refused it because she signed it "without his permission" (I'm left to wonder how they know that she didn't have permission, unless they consider any endorsement by proxy without a prior agreement in that light), they stepped over the line.
The restriction is usually that a proxy endorser must endorse it with their own name unless the proxy endorsement is a mark or stamp. As always, if you want to do this sort of thing, check with your financial institution to find out what practices they observe.