I told the loan officer not to accept the cashier's check with "loan pay off" written on the memeo line. Am I off base?

Does it actually pay off the loan?

No, it is only half of the payoff. Sorry I should have said that.

Then I agree not to accept the check.

Is the memo line actually binding on anything? Why would you not accept the check for payment on the loan even with that designation on the memo line?

May depend on your state UCC, but look at UCC 3-311. If it were allowed to stand, how would anybody be in debt?

Ooh...if that's the case, I have a few "loan payoff" checks to write!!

Our DepositPro disclosure forms have a section called "Check Legends" - to paraphrase - 'we can disregard any information other than signature of drawer, identification of drawee bank and payee, amount, endorsements, and any information on the MICR line. Also absolves us regarding restrictive language, including "Paid in Full", "Two Signatures Required", "Void After 90 days", etc.

The disclaimer reads "In accordance with reasonable banking standards, most checks and other items are processed through automated processing and, except in limited circumstances and in our discretion, most items are not individually examined."

Any exceptions require written the confirmation of the Bank.