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#269961 - 11/02/04 08:05 PM Stop Payment Time Frame
BeachGirl Offline
100 Club
Joined: Sep 2001
Posts: 206
Myrtle Beach, SC
If we have the ability on our system to place a stop payment on a check indefinitely, is it okay, or must we abide by the UCC 6 month rule and require the customer to renew the stop pay after 6 months?
Thanks for your input!
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Operations Compliance
#269962 - 11/02/04 08:31 PM Re: Stop Payment Time Frame
John Burnett Online
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John Burnett
Joined: Oct 2000
Posts: 39,685
Cape Cod
The only person who would have a right to take legal action if you bounced a check for stop payment after the 6 month period is your customer. And it's likely you could eliminate that possibility by adding language to your deposit contract and/or your stop payment forms/screens indicating the length of time you honor stop payments.

Here are the two downside considerations of which I am aware --
  1. Each stop payment record may be a chargeable item on your monthly service provider invoice, if you use an outside data processor.

  2. If your system provides both a "hard" stop report (match on account number, dollar amount and serial number) and a "suspected stop" report (account number and either dollar amount or serial number), the latter could grow to become unmanageable if you get too many stops.

If neither of those considerations bothers your bank, you may reasonably decide to start using these "super stops."
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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