The League now offers a Claim and Declaration of Loss for Lost, Stolen, or Destroyed Credit Union Cashier’s Check or Teller’s Check form for use under Wisconsin law.
The form can be used with proper procedures to protect the credit union from liability on its own cashier’s or teller’s check while accommodating a remitter or payee who claims that they had possession of the check when it was lost, stolen, or destroyed. The procedure requires the credit union to honor the lost, stolen, or destroyed check if presented before the claim becomes enforceable 90 days after the check was issued.
Form WCUL #83000 is now available for download and purchase online at Miscellaneous Forms & Supplies. The license to use the form is for a calendar year. Sample images can be found on The League’s website.
The form is a laser-printed .pdf file. It has fillable fields that the credit union may complete longhand or on its desktop. It may not be cost-effective to map the form to the credit union’s data processing system because the form is not necessarily completed by a member or accountholder. A non-member payee may make the claim if the check was lost, stolen, or destroyed when they had possession.
ii Release No. 0049 – Checks / Share Drafts, has been updated regarding lost, stolen, or destroyed cashier’s checks, teller’s checks and certified checks. It describes The League’s new form WCUL #83000.
Use of the form
Members have the legal right under the Uniform Commercial Code to stop payment on their own personal check for any reason.
But members or other parties who are remitters or payees do not have the right to stop payment on the credit union’s cashier’s check or teller’s check for any reason. The same goes for a member’s personal check certified by the credit union. Those checks are signed by a credit union official and are obligations of the credit union. The credit union would normally be held liable for the check, interest, expenses, and sometimes consequential damages if it wrongfully refuses to pay these items. That is why cashier’s, teller’s, and certified checks are usually viewed as being “as good as cash.” (Of course, they are worthless if counterfeit.)
A member should never be allowed to stop payment on the credit union’s official check because they have delivered it to the payee but now have a dispute. The credit union will have put itself into the middle of the dispute and will have no protection from liability.
But the UCC provides some leeway to accommodate certain parties in the case of a lost, stolen, or destroyed cashier’s check, teller’s check, or certified check. That’s where the new form can help – at least for cashier’s and teller’s checks.
The WCUL form is not designed for use with certified checks, so they are omitted from the discussion below. Few institutions have the need or the procedures to certify checks in recent years. If you do certify a member’s check, do not use the WCUL #83000 if the check is lost, stolen, or destroyed.
Claim and declaration of loss
Wisconsin law provides that a person may assert a claim to the amount of a cashier’s or teller’s check by a communication to the credit union that issued it by describing the check with reasonable certainty and requesting payment of the amount of the check, if all of the following apply:
- The claimant is the remitter or payee of a cashier’s check or teller’s check,
- The communication contains or is accompanied by a “declaration of loss” of the claimant with respect to the check,
- The communication is received at a time and in a manner affording the obligated bank (e.g., credit union) a reasonable time to act on it before the check is paid, and
- The claimant provides reasonable identification if requested by the obligated bank.
This claim procedure is not available to the endorsee (i.e., a person to whom the payee has endorsed the check) of a covered check. The procedure is available only to the persons identified above.
The declaration of loss is a written statement made under penalty of perjury to the effect that:
- The declarer lost possession of the check,
- The declarer is the remitter or payee of the cashier’s check or teller’s check,
- The loss of possession was not the result of a transfer by the declarer or a lawful seizure, and
- The declarer cannot reasonably obtain possession of the check because:
(1) the check was destroyed,
(2) its whereabouts cannot be determined, or
(3) it is in the wrongful possession of an unknown person or of a person that cannot be found or is not amenable to service of process.
Please note that this procedure is available to the persons described above, even if they are not members of the credit union. For example, the credit union must allow it to be used by a payee of a cashier’s check, such as a merchant or creditor, even if they are not a member.
What are the effects of the claim and declaration of loss?
Wis. Stats. § 403.312(c) sets forth the rules that apply if a claim is asserted in compliance with the statute:
The claim “becomes enforceable” at the later of:
- the time that the claim is asserted, or
- the 90th day following the date of the check in the case of a cashier’s check or teller’s check (or the 90th day following the date of the acceptance in the case of a certified check).
Before the claim becomes enforceable
Until the claim becomes enforceable as described above, it has no legal effect. The credit union may pay the cashier’s check (or, in the case of a teller’s check, may permit the drawee to pay the check). Payment to a person entitled to enforce the check discharges all liability of the credit union with respect to the check. (Recall the earlier discussion of how the credit union is generally liable for refusing to pay its cashier’s checks!)
Remember – if the credit union refunds the amount of the check to the claimant before the claim becomes enforceable the claim has no legal effect. It does not protect the credit union. The credit union is still liable on the original check and is subject to paying out on the check again if presented by a person entitled to enforce the check. This means that it is very important to delay reimbursement to the claimant (even if it is a member) until the claim has become enforceable.
After the claim becomes enforceable
If the claim and declaration of loss become enforceable before the cashier’s check is presented for payment, the credit union is not obliged to pay the check.
When the claim finally becomes enforceable, the credit union is obliged to pay the amount of the check to the claimant if payment of the check has not already been made to a person entitled to enforce the check.
Subject to the UCC’s midnight deadline for returns and notices of dishonor (Wis. Stats. § 404.302 (1)(a)), payment to the claimant discharges all liability of the credit union with respect to the check.
The Wisconsin law provides that if the credit union pays the amount of the check to the claimant under the claim when it becomes enforceable and the missing cashier’s check is later presented to the credit union for payment by a person having rights of a holder in due course, the claimant is obliged to:
- Refund the payment to the credit union if the check is paid, or
- Pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.
Areas of caution
Please note that there are times when this claim and declaration of loss procedure does not apply or protect the credit union, such as:
- When the credit union refunds the check proceeds without waiting until the later of the completion of the claim/declaration of loss form, or 90 days after the cashier’s or teller’s check was issued. The declaration of loss procedure does not relieve the credit union from liability on the original check until this time period has passed.
- When the check was lost or stolen but the claimant knows who has the check, the person can be found, and the person is amenable to service of process. The law and form do not apply to this situation. They would not protect the credit union if used. The member may seek legal guidance for what remedies they may have against the person who has their check.
- When the claim/declaration of loss is filed by an endorsee. The declaration of loss procedure is not available to an endorsee of the payee on the check. If the payee of a credit union’s cashier’s check endorses it over to a third person who loses the check, the third person has no rights under this procedure. The law was written to exclude an endorsee because they are not an original party to the check or a remitter. The credit union would not have their name in their records. The endorsee may be able to use a different procedure, such as the one under Wis. Stats. § 403.309.
Can the credit union waive the 90-day waiting period and pay the claimant sooner?
Failing to wait the 90 days from issue of a cashier’s check to ease hardship for a member may be tempting. But it exposes the credit union to risk if the missing check, later – within the 90 day period – surfaces in the hands of a person entitled to enforce the check. The claim and declaration of loss only becomes enforceable at the later of:
- the time that the claim is asserted, or
- the 90th day following the date of the cashier’s check.
Some institutions are willing to refund the amount of a missing cashier’s check to the claimant in less than 90 days if the claimant provides an indemnification agreement or an indemnification bond. But as pointed out above, the credit union remains obligated to pay a person entitled to enforce the check until at least 90 days after the check was issued. An indemnification agreement or indemnification bond does not actually shield the credit union from liability. It provides some hope that the credit union will recover a loss, from the claimant in the case of an indemnity agreement, or from an insurance company in the case of an indemnity bond.
If considering either of the above indemnification tools, please note that under the law, the remitter or payee of a cashier’s check or teller’s check (or the drawer or payee of a certified check) has the right to file a declaration of loss without indemnification.
- The credit union cannot require indemnification as a condition of accepting a declaration of loss. Thus, The League’s Claim and Declaration of Loss for Lost, Stolen, or Destroyed Credit Union Cashier’s Check or Teller’s Check form (WCUL #83000) does not include an indemnification agreement.
- Be sure that any indemnification tool you may use is conditioned on waiving the 90-day waiting period, and not conditioned on acceptance of a declaration of loss.
- An indemnification agreement or bond for just the face amount of the check may still leave the credit union exposed to bear any loss of interest, consequential damages, and expenses (including attorney fees) owed to a person entitled to enforce the check.
WCUL fillable .pdf forms
Credit unions may use the fillable .pdfs on their desktops or have them mapped to their data processing systems. It is up to the credit union to forward their licensed .pdf files to the data processor, if they choose, for installation and mapping for use on the credit union’s system. Your data processor will not have the forms until you forward them! Credit unions may also share this Compliance Courier with their data processor if doing so will aid in mapping fields.
Laser forms should be printed and reviewed for proper display. Compare printouts of the installed forms to the final proofs available through the links above.
Please keep in mind that the licenses for WCUL forms permit use of the same .pdf files for manual completion on a desktop. This may be a valuable option during the time it may take for a data processor to map the fields when putting an updated form on the system.
Please address form order questions to Jeff Bonk at 800-242-0833, ext. 6044, and questions about completion of the form and compliance to John C. Engel at ext. 6007.
Important reminders
Please keep in mind that WCUL forms are designed for use with transactions subject to Wisconsin law and applicable federal law.
Remember that the forms you use are important legal documents governing your transactions with affected members. Credit unions are responsible for reviewing forms to determine that they are appropriate for the transaction. Users should read and become familiar with the terms of each form they use and how they must be completed for compliance.
By purchasing this form, you agree to the Terms and Conditions of W.C.U.L. Services Corp.