We do not have any specific information regarding banks using bank drafts instead of cashier’s checks, but it may be a result of the recent Illinois Supreme Court decision in MidAmerican Bank, FSB, v. Charter One Bank, FSB. The court in MidAmerican held that stop payment orders are prohibited on cashier’s checks. The use of a bank draft would avoid this issue. A bank draft is a draft written by the bank against its funds on deposit with another bank. As a draft written by the bank, the bank retains the power to place a stop payment order on it.
Where can I find information about Bank Drafts? We are hearing that some banks are using drafts as opposed to Cashier’s Checks so that stop payments can be placed on the items.
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