Stop Payment on Interest Checks

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Question:

What are the requirements for stop payments on interest checks? Would interest checks fall under the definition of official checks?

Answer:

For this question, we need to look at the definitions of cashier's check and teller's check in the UCC, not the refined definitions in Reg CC. I believe that an interest check from a bank qualifies as either a cashier's or a teller's check (depending on whether it's drawn on the issuing bank or on another bank), and would be subject to the UCC section 3-411 provisions penalizing banks that stop payments on their official checks. That would also mean that section 3-312's provisions for lost, stolen or destroyed official checks would also apply.

First published on BankersOnline.com 3/20/06