Welcome to the on-line
November - December 2003 issue of the
Community Bankers' Advisor
. . . . . .
. . . . .
The Advisor is
prepared by attorneys at Olson & Burns, P.C. to provide information
pertaining to legal developments affecting the field of banking.
In order to accomplish this objective, we welcome any comments
our readers have regarding the content and format of this publication.
Please address your comments to:
Community Bankers' Advisor
c/o
Olson & Burns, P.C.
PO Box 1180
Minot, ND 58702-1180
olsonpc@minotlaw.com
Also,
visit our web site at:
www.minotlaw.com
The attorneys
at Olson & Burns represent a wide range of clients in the financial
and commercial areas. Our attorneys represent more than 30 banks
throughout North Dakota. |
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Early Stop Payment On An Official Check
by Mary Beth Guard
Question: We have a customer who closed an account
with the bank and requested the funds from the closing be sent to their
out of state address. It was mailed about a month ago and the customer
has not received the cashier's check the bank mailed. Can we put a stop
payment on our own cashier's check before 90 days?
Answer: Don't use a stop payment. Instead, use the
procedure under Section 3-312 of the Uniform Commercial Code [N.D.C.C.
§ 41-03-37.1] to provide a legal basis for you to return the check
unpaid and protect your institution against getting sued for wrongful
refusal to pay the cashier's check. If you truly can't wait ninety days,
there are some precautions you will want to take, too.
First, have the customer sign a Declaration of Loss form under oath
before a notary attesting to the fact that the customer has lost the
cashier's check or never received it. It should include all the facts,
as the customer knows them. You will want to make sure the customer
states that he never received it, or that if he received it, then lost
it, that he did not endorse it prior to losing it. If the lost item
has already been endorsed, the customer is out of luck.
Once 90 days have passed, if the item is presented for payment, you
can return it unpaid due to an enforceable claim being made under UCC
3-312 [N.D.C.C. § 41-03-37.1].
If the customer does not want to wait until the ninety days have passed,
you are taking a risk if you place a stop payment on the item. If the
check is presented for payment, but has a forged endorsement, you can
return the check unpaid by the midnight deadline marked "forged
endorsement" -- NOT "stop
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