The bank does not have to pay the check after 90 days with the declaration of loss. So what risk are you talking about?

If the client files the claim, he will have the fund refunded in 90 days. How would I get the fund? Plus they bought some one way tickets from me to Italy for September so they won't even be here in 90 days.

I was told by the person at the Kansas State Banking Commission that they changed that UCC code exactly because it is so hard to get indemnity bond.

From the cite you posted:

(4) When the claim becomes enforceable (which as you say is after the 90 days), the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to the provisions of subsection (a)(1) of K.S.A. 84-4-302 and amendments thereto, payment to the claimant discharges all liability of the obligated bank with respect to the check.

(c) If the obligated bank pays the amount of a check to a claimant under subsection (b)(4) and the check is presented for payment by a person having rights of a holder in due course, the claimant is obliged to (i) refund the payment to the obligated bank if the check is paid, or (ii) pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.

I wish that UCC code could be more specific leaving no room for misinterpretation.

b.4 means if for some reason, the bank failed to flag their system and paid on the originally lost check after they gave me the replacement, then I am obligated to pay them back which is fine with me.

The purpose of Section 3–312 is to offer a person who loses such a check a means of getting refund of the amount of the check within a reasonable period of time without the expense of posting a bond and with full protection of the obligated bank.http://www.ali.org/ali/AmCom3-312-312.htm

"The obligated bank MAY NOT impose additonal requirements on the claimant to assert a claim under subsection (b). for example, the obligated bank may not require the posting of a bond of other form of security." Source: Official UCC Comment

That does not prevent the obligated bank from requiring a bond if the claimant wishes the claim to be paid early.

John, we are talking about after 90 days. I am willing to wait 90 days and they still require the bond like I said in the first post. I don't know how many people the Fidelity State Bank has already unlawfully inconvenienced in the past 13 years because that statute was passed 1992! I want to be the person to force them to change their policy so nobody like me in the future will have to face this problem. Their attitude is arrogant and mean. The bank president said he can do whatever he wants because "I run the bank". Hello Mister, we have laws in this country!!!!

I applaud your efforts because I agree with your stance. The bank should not be asking for a bond if the 90 days has already elapsed.

Unless you have plenty of cash that you're willing to spend on this just cause, I thnk you're left with the option of trying to convince the state banking authorities to intervene. The bank president appears not to realize that his bank is not at risk in honoring the claim.

But I faxed to him the copy of that statute which said the bank is discharged of all liability with declaration of loss. He said he also consulted his lawyer. I can't believe it. A bank president and his lawyer can't read English!