If the bank issues cashier checks for CD interest etc. and this check is lost, I am assuming the Bank does not need to follow UCC section 3.312? We would like to issue stop payment right away on these types of checks. Is my assumption correct? TIA!

Why not? It is still a cashier's check. But if the interest check is a small amount. most banks do not bother. To get around this, stop issuing interest checks. Direct deposit or compounding should be the only options offered.