I've read that banks should have a declaration-of-loss statement that can be notarized. How do I get the form from a bank that seems to prefer to hold on to the money for five years? Doesn't insurance from the Federal Deposit Insurance Corp. cover us since the amount is less than $250,000? Should the bank provide me with their Uniform Commercial Code regulation or Regulation CC in regard to cashier's checks?
-- Georgiana Grief
Dear Georgiana,
Bank/cashier's checks are guaranteed funds, so the process to "stop payment" or replace the item is more complicated than with personal checks. Financial institutions cannot place a traditional stop-payment on a cashier's check once issued.
The Uniform Commercial Code is a recommended standardization of laws to be adopted by the states, but as such, it isn't necessarily uniform across states. States can choose to modify the code. Section 3-312 of the Uniform Commercial Code speaks to the replacement of a lost, destroyed or stolen cashier's check, teller's check or certified check. This section of the code was written to eliminate the need for an indemnification agreement or an indemnification bond to protect the bank against the possibility that the original check is presented for payment.
It's been longer than 90 days, so the bank is obligated to reissue the check upon receipt of a "declaration of loss" by your grandmother. She may need to work with an attorney if she can't get the bank to meet its obligations under Tennessee law concerning this check.
This isn't a Regulation CC issue. Regulation CC refers to the hold a financial institution can place on a check and how much should be available the next business day. It does not cover the replacement of official checks. It's also not an FDIC issue because the deposit insurance protects the depositor against bank failure, not misplaced cashier's checks.