Question: Our stop payment disclosures tell our customers that oral stop payments are valid for 14 days. When they are accepted they are entered on the DDA system with a 14 day expiration date from the date of oral notice. The disclosures also state that signed written orders received within the 14 calendar day period are valid for 6 months from the date they are received. If we take an oral stop order today (3/6) and key in 3/20 as the expiration date, then receive a signed written order on 3/15, we maintenance the expiration date to 6 months from 3/15. Are we doing anything wrong? The oral order was on for 9 days when the written was received, then we extend it for another full 6 months.....In other words, the order is on for 9 days plus six months... Are we doing anything wrong?
Answer: Here's how the statute reads:
"A stop-payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing given to the bank within a period during which the stop-payment order is effective."
My view is that if someone places a stop payment order on 3/6, it will be good for six months from that date if confirmed in writing with 14 days, but if it's not confirmed in writing within 14 days, it lapses after the 14 days. In other words, the total time period would be six months -- not 6 months plus. This is supported by the direct language of the statute and by its reference to "additional six-month periods" in the renewal section.
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