We believe that you could alter your account agreements to eliminate the requirement that customers send written confirmations of oral stop payment orders. The Uniform Commercial Code (UCC) does not require a signature on stop payment orders, but you should check your existing account agreements and confirm that your policies do not require a signature on stop payment orders.

Under the UCC, customers can request a stop payment by “an order to the bank describing the item or account with reasonable certainty . . . .” 810 ILCS 5/4-403(a). An initial stop payment order may be oral, provided that it is “confirmed in writing” within fourteen days (and there is no mention of a signature requirement). 810 ILCS 5/4-403(b).

The requirement to confirm oral stop payment orders in writing could be eliminated by revising your deposit agreements and disclosing this policy to your customers, though this would slightly increase the risk of liability to your institution. The UCC authorizes banks to alter the effect of any provision in Article 4, including Section 4-403, provided that the bank retains “responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack of failure.” 810 ILCS 5/4-103(a). Of course, we recommend that you consult with bank counsel before revising your account agreements and policies.