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Home >> Checks/Money Orders
Cashier's Check Bounces: Bank Fines Me!
I recently received a cashier's check for $12,500, as a down payment for the sale of some property I own. The cashier's check was given to me at signing. I held it for less than sixty days, not thinking anything, because it was a cashier's check. I recently deposited it into my account. It was later removed from my account, with the following note: "Returned Check Return Deposit Item - Stop Pay WP". On top of this, my bank charged me for the returned check! I was under the impression a cashier's check can only be stopped under certain circumstances, and that if the check were to be deposited before ninety days, the bank is required to honor it. The bank is giving me the runaround, and no answers as to why they will not honor the check. What are my options? Am I just out of luck?
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 Since the validity of the check doesn't appear to be in question, its puzzling as to what is going on, because cashier's checks are not subject to stop payment orders. The issuing bank can be liable not only for the amount of the check, but also for costs and damages resulting from its refusal to pay it. Your bank could support you, as a holder in due course of the check. As payee, you can also go after the issuing bank to enforce payment. If the remitter (the party that purchased the check and gave it to you) placed a claim with the issuing bank that the check was lost, stolen or destroyed, the claim would clearly be fraudulent, and would not be enforceable in any event until ninety days after the date of the cashier's check, under Section 3-312 of the Uniform Commercial Code (check the version of the UCC adopted by your state).
It's possible that the remitter had second thoughts concerning the purchase of your property. If that's the case, the proper way to go would have been to work with you, not to bend the law and attempt to have the bank refuse payment on its cashier's check. If your bank won't pursue this matter, talk to an attorney.
Published on BankingQuestions.com 5/26/10
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