I am posting anon so that this may not get traced back to anyone here. However, I have a situation and would like some direction.

I work at a processing center where we also do returns for multiple banks. One of the banks has been putting stop payments on their cashier's checks. We have discussed with them that doing so does not follow regulation. They state that as long as there is an indemnity agreement with their customer for whatever reason (goods not delivered) or whatever, they can do so.

I am unclear where exactly to direct them in this case? I am also unclear on how to interpret the UCC code for them. Needless to say, I am doing what I can to cover my backside. Does anyone have any thoughts, suggestions, ideas, or directions to send me?

Thanks in advance!

Suggest that your clients read sections 3-312, 3-411 and 3-412 of the UCC and consult with their bank attorneys on the proper course of action.

It may be that the banks are using the stop payment mechanism to flag checks subject to 3-312. It may be that they are simply misunderstanding the law.

The other possible course of action is for management of your organization to ask an attorney to prepare a synopsis of the law in this area, with the understanding that you will be sharing it with your bank clients. Then do so. More than that I don't think you can do.

I have read through all three pieces of documentation and nowhere does it come out and say "don't put stops on cashier's checks" - which is why I think they feel that they are within their rights. Besides the fact that I see why we need attorneys to interpret the law - (they write so that they have to come back and interpret it - more $ in their pockets - right)... I am wondering if there is a way to approach this to help them understand the code more clear?