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Stop Pay on Cashier’s Check: Who pays?
by Mary Beth Guard and John Burnett
Guru BIOS
Question: An individual issues a cashier’s check to a customer of the bank. The customer makes the deposit of the cashier’s check into business account
and the bank pays out the money to the customer. A few days later, the cashier’s check is returned for stop payment (allegedly broken contract); who is liable for the loss
(the customer or bank)?
Answer: Cashier’s checks are not subject to stop payment orders. As a holder in due course of the cashier’s
check, either you (the bank) or your customer can demand payment from the issuing bank.
The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.
First published on BankersOnline.com 6/13/05
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