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October 29
Documenting an Applicant's Intent to be a Joint Applicant;
David Dickinson

November 4
Issues with Deceased Customers;
Mary Beth Guard and John Burnett

November 5
Vault Burglaries, Floods, Fires & Other Disasters;
Dave McGuinn

November 6
MLO v LO - Who Has to Do What?;
Jack Holzknecht and Mary Beth Guard

November 13
Domestic Violence & Workplace Violence: There Is A Link;
Shelly Collins and Dana Turner

November 18
Understanding USPAP and Regulatory Guidelines for Appraisal and Evaluation Compliance Reviews;
Eric Collinsworth



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#1647370 - 01/06/12 12:45 PM Stop Payments on Official Checks
I_heart_audit Offline
Junior Member

Registered: 06/15/11
Posts: 48
Loc: Midwest, United States
Hello, I'm currently reviewing our bank procedures regarding issuing stop payments on official checks. Our procedures state that to place a stop payment order on cashiers checks, bill payment checks and cd interest checks that a signed indemnity bond should be obtained and a completed stop payment form. Although I worked in a number of areas within banking, this is my first year as an auditor.
- Do bill payment checks or cd interest checks really need an indemnity bond?
- Should an indemnity bond be completed for personal money orders?
- Who signs the stop payment form for cashiers checks? The customer or an employee?
Please offer any assistance regarding how your institution deals with these situations. Thank you!

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Audit
#1647795 - 01/07/12 04:47 PM Re: Stop Payments on Official Checks [Re: I_heart_audit]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 50412
Loc: Galveston, TX
I think in all States it would not be legal to place a stop payment order on a Cashier's Check. I'm trying to think why a stop payment order would be issued on a bill payment or CD interest check and I can think of few. Indemnity bonds are a risk management call in any case. I'm not even sure where a person can buy one anymore.
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The opinions expressed are my own, take them or leave them.

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#1651155 - 01/13/12 04:08 PM Re: Stop Payments on Official Checks [Re: I_heart_audit]
Jennifer K Offline
Member

Registered: 07/29/09
Posts: 76
Loc: Pacific Northwest
The UCC (3-312) outlines how a claim for a lost, stolen, destroyed instrument can be perfected. Once perfected, the claim is enforceable.

At our institution, we have the claimant complete a "Declaration of Loss" form after which management will review, determine whether the item is still outstanding and then centrally a stop payment is placed on the item to cause it to reject and prevent duplicate payment of the item since a refund has been processed.

While placing a Stop Payment in general is not permitted, this is how to prevent duplicate payment of an item only after the UCC requirements have been met.
_________________________
The opinions expressed are mine and do not necessarily reflect those of my employer.

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