Legal Question in Business Law in California

What do the lending bank's records say? I'm not clear on what you mean by "my records." Does that includes records in your possession, but generated and sent to you by the bank? I guess I'd call those the bank's records.

If the bank thinks you owe the money, but you never cashed the check it issued to you as a disbursement of funds, and no one else cashed it, then there is a discrpancy in the bank's records that it needs to correct. I would think there are two, maybe three ways the lending bank can correct its error:

1. The bank can cancel the indebtedness represented by the uncashed check and either stop payment on it or have you return it for cancellation.

2. The bank can issue you the funds represented by the expired check, either as a direct deposit to your account or by issuing a replacement check; or possibly

3. It can honor the "expired" check at its option.

I think the bank's options (1 vs. 2 or 3) depend upon the terms of the loan, which I know nothing about.

In any case, you are entitled to records and statements that reflect reality, and probably to an adjustment as to interest on funds you never received. Again, I'd say I think both you and the bank are partly at fault here, and the terms of the loan will probably control how things get straightened out.

A final observation is that making disbursements by checks with expiration dates seems odd; why aren't the loan funds deposited directly into a checking account in your name at the lending institution?