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Cancelling a Stop Pay
by John Burnett, BOL Guru
Guru Bio
Question: Is it true that only the person that authorized a stop payment request on a joint checking account can cancel the stop payment? I cannot find where the UCC code addresses the subject of cancelling a stop payment order.
Answer: You can't find it in the UCC because it's not there. I use this logic -- the law gives any person signing on an account the right to stop payment on a check drawn on that account. Assuming that John and Mary have a joint account, and that John has put a stop payment on a check that Mary wrote, when Mary tells the bank to pay the check, John's stop order is still there saying, "No!" Mary always has the option to write another check to make an 'end run' around John's stop order. When asked, I always recommend that banks include a provision in their deposit agreements that states that a stop cannot be lifted except by the individual who issued it. That clears the issue.
First published on BankersOnline.com 4/23/07
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