Legal Q&A: Refusing to Pay a Cashier’s Check

Q: Can a Bank Refuse to Pay a Cashier’s Check?

A: It Depends.

Generally speaking, Wisconsin 403.411 restricts obligated banks from placing a stop payment on cashier’s checks. Aside from the situation where a cashier's check is lost, stolen, or destroyed, the only time a bank can refuse payment on a cashier's check is when the bank has a claim against the individual who is presenting the check. Thus, a bank should consider whether it is prepared to assert that it has a reasonable claim against the person entitled to enforce the instrument before placing a stop payment on a cashier’s check.

The only specific condition under which a bank is permitted to place a stop payment on a cashier’s check is if the item is claimed as lost, stolen, or destroyed. If that occurs, the stop payment can be placed either at the time the claim is made or 90 days after the check was issued, whichever date is later, pursuant to Wis. Stat. Section 403.312.

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance.

By, Ally Bates