Common use of Stop Payment Liability Clause in Contracts

Stop Payment Liability. The fee for a stop payment order is set forth on the Rate and Fee Schedule. A member can only stop payment on a check written from their check book or an ACH item approved by the member. A Credit Union cashier’s check is considered guaranteed funds and constitutes a direct obligation of the Credit Union to pay the item regardless to any circumstance that should arise after issuance. Therefore, stop payment orders are prohibited on the Credit Union cashier’s check. The only legitimate reason to approve a stop payment request on a Credit Union cashier’s check is if the Credit Union believes the cashier’s check has been altered or when the member has sworn by affidavit that the cashier’s check has been lost or stolen. You are still liable to any holder of the cashier check and to the Credit Union. You agree to indemnify and hold the Credit Union harmless from all cost, including attorney’s fees, damages or claims related to the stop payment order and our refusing payment of the cashier’s check, including claims of 19 any multiple party account owner, payee, or endorsee in failing to stop payment of an item as a result of incorrect information provided by you. The Credit Union also reserves the right to freeze the amount of the replacement cashier’s check in your account or have you post a bond for the amount of the replacement cashier’s check.