Is there any Illinois law that addresses stop payment requests received orally?

Yes, the Illinois Uniform Commercial Code (Illinois UCC) addresses stop payment requests received orally.

The Illinois UCC generally provides that a stop payment order for any item drawn on a customer’s account is effective for six months. However, an oral stop payment order lapses after fourteen calendar days if it is not confirmed in writing within that fourteen-day period.

Note that the Illinois UCC’s timing requirements for oral stop payment orders may be altered in your account agreement — the Illinois UCC’s provisions may be varied by agreement, with the limitation that an agreement “cannot disclaim a bank’s responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure.”

For electronic fund transfers, Regulation E provides that a financial institution may require a consumer to give written confirmation of a stop payment order within fourteen days of an oral notification. If a customer does not provide written confirmation within this time frame, the order ceases to be binding.

For recurring ACH debits from consumer accounts, the Nacha rules require a Receiving Depository Financial Institution (RDFI) to honor a stop payment order provided at least three banking days before a recurring debit’s scheduled date, regardless of whether the order is made verbally or in writing. For non-consumer accounts, an RDFI must honor a stop payment order provided “at such time and in such manner as to allow the RDFI a reasonable opportunity to act upon the stop payment order prior to acting on the debit Entry.” But a verbal stop payment order ceases to be binding if it is not confirmed in writing within fourteen days.

For resources related to our guidance, please see:

Illinois UCC, 810 ILCS 5/4-403(a) (“A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer’s account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in Section 4-303. If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account.”)

Illinois UCC, 810 ILCS 5/4-403(b) (“A stop-payment order is effective for 6 months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing given to the bank within a period during which the stop-payment order is effective.”)

Illinois UCC, 810 ILCS 5/4-103(a) (“The effect of the provisions of this Article may be varied by agreement, but the parties to the agreement cannot disclaim a bank’s responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure.”)

Regulation E, 12 CFR 1005.3(a) (“This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer’s account.”)

Regulation E, 12 CFR 1005.10(c)(1) (“A consumer may stop payment of a preauthorized electronic fund transfer from the consumer’s account by notifying the financial institution orally or in writing at least three business days before the scheduled date of the transfer.”)

Regulation E, 12 CFR 1005.10(c)(2) (“The financial institution may require the consumer to give written confirmation of a stop-payment order within 14 days of an oral notification. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification. An oral stop-payment order ceases to be binding after 14 days if the consumer fails to provide the required written confirmation.”)

2023 NACHA Operating Rules, Subsection 3.7.1.1 RDFI Obligation to Stop Payment of Recurring Entries (“An RDFI must honor a stop payment order provided by a Receiver, either verbally or in writing, to the RDFI at least three Banking Days before the scheduled date of any Recurring debit Entry to a Consumer Account. An RDFI may in its discretion honor such a stop payment order received within such three Banking Day period.”)

2023 NACHA Operating Rules, Subsection 3.7.2 RDFI Obligation to Stop Payment of Entries to Non-Consumer Accounts (“An RDFI must honor a stop payment order regarding any debit Entry initiated or to be initiated to a Non-Consumer Account that is provided by a Receiver at such time and in such manner as to allow the RDFI a reasonable opportunity to act upon the stop payment order prior to acting on the debit Entry. The RDFI must comply with a verbal stop payment order only for a period of fourteen days unless the order is confirmed in writing within that fourteen-day period.”)