Definition Of Suretyship | What Is A Surety
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#1445461 - 09/20/10 02:24 PM Surety Bonds on Lost Cashier's Checks
PackinHeat Offline
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Registered: 08/05/10
Posts: 9
Can a financial institution request a Surety Bond for a lost, stolen or stale Cashier's Check before re-issuing?

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#1445471 - 09/20/10 02:32 PM Re: Surety Bonds on Lost Cashier's Checks [Re: PackinHeat]
Georgia Plum
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Yes, if you can find anyone to write the bond.

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#1445475 - 09/20/10 02:35 PM Re: Surety Bonds on Lost Cashier's Checks [Re: PackinHeat]
Elwood P. Dowd Offline
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Look at your state's version of the UCC, specifically 3-312. As noted, such bonds are somewhere between difficult and impossible to obtain. Your state statutes may provide an alternative.

P.S. Cashiers checks do not get "stale."
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#1445489 - 09/20/10 02:43 PM Re: Surety Bonds on Lost Cashier's Checks [Re: Elwood P. Dowd]
John Burnett Offline

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UCC 3-312 addresses "Lost, Destroyed or Stolen" cashier's checks, teller's checks or certified checks.
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John S. Burnett
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#1445514 - 09/20/10 03:11 PM Re: Surety Bonds on Lost Cashier's Checks [Re: John Burnett]
PackinHeat Offline
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Registered: 08/05/10
Posts: 9
I reviewed 3-312, it aslo makes reference to 3-309 (B). Last sentence--Adequate protection for the person required to pay the instrument may be provided by any reasonable means. Am I reading this wrong or would the Surety Bond apply in that sentence?

We already require the Surety Bond on checks over $500.00, and to date have been successful. However, while working on a check that was over six months old, the question of the Surety Bond came up. This was in place and was a practice of ours for several years. I am following up to make sure we are not doing something wrong.

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#1445529 - 09/20/10 03:28 PM Re: Surety Bonds on Lost Cashier's Checks [Re: PackinHeat]
Georgia Plum
Unregistered


As Ken said above, cashiers checks don't get stale. You have to honor them until you escheat them. What do you mean 'while working on a check that was over six months old'?

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#1445545 - 09/20/10 03:45 PM Re: Surety Bonds on Lost Cashier's Checks [Re: ]
PackinHeat Offline
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Registered: 08/05/10
Posts: 9
I get that part, just call it a slip of the fingers and brain! I know they don't get stale smile. We review outstanding checks after six months. We contact the purchaser to make them aware of the outstanding check. After 3 tries, it sits until Escheated

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#1445560 - 09/20/10 04:21 PM Re: Surety Bonds on Lost Cashier's Checks [Re: PackinHeat]
John Burnett Offline

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Registered: 10/27/00
Posts: 37349
Loc: Cape Cod
As suggested above in this thread, you need to know what your state's version of 3-312 says, and whether the legislature adopted a commentary for it. In some states, the commentary indicates that no bond can be required as a condition of honoring a valid 3-312 claim. Arguably, if the bank were to consider paying for the claim before it matures (before the 90-day waiting period ends), a bond could be required, if available, but the bond should sunset with the 90th day.

In other states, there's no official commentary.

And in New York, look in that state's unique version of UCC 4-406.
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John S. Burnett
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#1445571 - 09/20/10 04:32 PM Re: Surety Bonds on Lost Cashier's Checks [Re: John Burnett]
PackinHeat Offline
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Registered: 08/05/10
Posts: 9
Thanks John: We found one of your old Threads from 1/28/2008 which actually is helping us with another issue. I will run it all by legal with all of my information. Thanks everyone.

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