I bought a bank cashier's check for $17,000 and now it is lost. My bank said that I could put a stop payment on it, but that in order to get a new one I would need to pay $400 for a surety bond. I need to get a new check, but can't pay the $400 extra. What can I do? The bank also told me that Arizona doesn't have a time period to get a check back if it is never cashed. Is this true?
In checking the online version of the Arizona Uniform Commercial Code, and the bank appears to be correct -- Arizona has not included section 3-312 of the model statute. That's the section that would provide a bank a way to handle claims for lost, stolen or destroyed cashier's, certified, or teller's checks.
The bank remains obligated to pay the original cashier's check if it should appear and be presented for payment by someone entitled to enforce it, so that could require the bank to pay twice, if it reissues the check. In a state that doesn't have UCC section 3-312, there remain three alternatives. First, the bank could simply refuse to re-issue or reimburse. Second, the bank could agree to re-issue/reimburse only if it can get a surety bond that will protect the bank if it has to pay the original check. Third, it can take the risk and replace the check, in the hope (unsecured) that it can recover from its customer if it has to pay the original check.
Clearly, the third alternative is not attractive to a bank, particularly for larger amounts. This is not a lot of help, but it does confirm what the bank told you.
Published on BankingQuestions.com 10/30/07
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In checking the online version of the Arizona 