Stop Payment on Bank Checks
Answer by John Burnett, BOL Guru
Question: Can a bank stop payment on a money order/banker's check/cashier's check?
Answer: Maybe and no and no.
If the money order referred to is a personal money order (not signed by the bank's representative), it's normally considered a special one-time customer deposit, subject to stop-payment rules. If it's a bank money order (signed by a bank rep), it's treated as a cashier's check (see below).
Not sure what you mean by a "banker's check." If it's a check drawn by a bank on another bank (sometimes referred to as a teller's check), a stop payment is not permitted under the UCC.
Ditto on a cashier's check. No stop payments.
There are rules against, and penalties for, refusal to pay a certified, teller's, or cashier's check (UCC §3-411). There are also specific procedures that can be followed to protect a bank from being liable for such a refusal if the check was lost, stolen, or destroyed (UCC §3-312).
First published on BankersOnline.com 10/4/04
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