Title XXVI, TRADE AND COMMERCE

400.4-210. Security interest of collecting bank in items, accompanying documents and proceeds. — (a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either: (1) in case of an item deposited in an account, to the extent to whi…

400.4-211. When bank gives value for purposes of holder in due course. — For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of Section 4…

400.4-212. Presentment by notice of item not payable by, through, or at bank — liability of drawer or endorser. — (a) Unless otherwise instructed, a collecting bank may present an item not payable by, through, or at a bank by sending to the party to accept or pay a written notice…

400.4-213. Medium and time of settlement by bank. — (a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing-house rules, and the like, or agreement. In the absence of such prescription: (1…

400.4-214. Right of charge-back or refund — liability of collecting bank — return of item. — (a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlemen…

400.4-215. Final payment of item by payor bank — when provisional debits and credits become final — when certain credits become available for withdrawal. — (a) An item is finally paid by a payor bank when the bank has first done any of the following: (1) paid the item in cash; (2…

400.4-216. Insolvency and preference. — (a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the p…

400.4-301. Deferred posting — recovery of payment by return of items — time of dishonor — return of items by payor bank. — (a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight …

400.4-302. Payor bank's responsibility for late return of item. — (a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (1) a demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case i…

400.4-303. When item subject to notice, stop-payment order — legal process or setoff — order in which items may be charged or certified. — (a) Any knowledge, notice, or stop-payment order received by, legal process served upon or setoff exercised by a payor bank comes too late to…

400.4-401. When bank may charge customer's account. — (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in …

400.4-402. Bank's liability to customer for wrongful dishonor — time of determining insufficiency of account. — (a) Except as otherwise provided in this Article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an…

400.4-403. Customer's right to stop payment — burden of proof of loss. — (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 descr…

400.4-404. Bank not obligated to pay check more than six months old. — A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, that is presented more than six months after its date, but it may charge its customer's accou…

400.4-405. Death or incompetence of customer. — (a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at…

400.4-406. Customer's duty to discover and report unauthorized signature or alteration. — (a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or…

400.4-407. Payor bank's right to subrogation or improper payment. — If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, t…

400.4-501. Handling of documentary drafts — duty to send for presentment and to notify customer of dishonor. — A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not…

400.4-502. Presentment of "on arrival" drafts. — If a draft or the relevant instructions require presentment "on arrival", "when goods arrive" or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal t…

400.4-503. Responsibility of presenting bank for documents and goods — report of reasons for dishonor — referee in case of need. — Unless otherwise instructed and except as provided in article 5 a bank presenting a documentary draft: (1) must deliver the documents to the drawee o…

400.4-504. Privilege of presenting bank to deal with goods — security interest for expenses. — (a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or o…

400.4A-101. Short title. — This Article may be cited as "Uniform Commercial Code Funds Transfers". ­­-------- (L. 1992 S.B. 448)

400.4A-102. Subject matter. — Except as otherwise provided in section 400.4A-108, this Article applies to funds transfers as defined in section 400.4A-104. ­­-------- (L. 1992 S.B. 448)

400.4A-103. Payment order — definitions. — (a) In this Article: (1) "Payment order" means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a benef…

400.4A-104. Funds transfer — definitions. — In this Article: (a) "Funds transfer" means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by…

400.4A-105. Other definitions. — (a) In this Article: (1) "Authorized account" means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, a…

400.4A-106. Time payment order is received. — (a) The time of receipt of a payment order or communication cancelling or amending a payment order is determined by the rules applicable to receipt of a notice stated in section 400.1-201(27). A receiving bank may fix a cut-off time o…

400.4A-107. Federal Reserve regulations and operating circulars. — Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this Article to the extent of the inconsistency. ­­-…

400.4A-108. Exclusion of consumer transactions governed by federal law. — (a) Except as provided in subsection (b), this article does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 (Title XX, Public Law 95-630, 92 Stat. 372…

400.4A-201. Security procedure. — "Security procedure" means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or (ii) dete…

400.4A-202. Authorized and verified payment orders. — (a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency. (b) If a bank and its custo…

400.4A-203. Unenforceability of certain verified payment orders. — (a) If an accepted payment order is not, under section 400.4A-202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to section 400.4A-202(b), the fol…

400.4A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order. — (a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the customer under…

400.4A-205. Erroneous payment orders. — (a) If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order (i) erroneously instructed payment to a beneficiary not intended by the sender, (ii) erroneously instructed p…

400.4A-206. Transmission of payment order through funds — transfer or other communication system. — (a) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to the bank, the system is …

400.4A-207. Misdescription of beneficiary. — (a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person …

400.4A-208. Misdescription of intermediary bank or beneficiary's bank. — (a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank only by an identifying number: (1) The receiving bank may rely on the number as the proper identifica…

400.4A-209. Acceptance of payment order. — (a) Subject to subsection (d), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order. (b) Subject to subsections (c) and (d) of this section, a beneficiary's bank accepts a payment order at…

400.4A-210. Rejection of payment order. — (a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally, electronically, or in writing. A notice of rejection need not use any particular words and is sufficient if it indicates that…

400.4A-211. Cancellation and amendment of payment order. — (a) A communication of the sender of a payment order cancelling or amending the order may be transmitted to the receiving bank orally, electronically, or in writing. If a security procedure is in effect between the sender…

400.4A-212. Liability and duty of receiving bank regarding unaccepted payment order. — If a receiving bank fails to accept a payment order that it is obliged by express agreement to accept, the bank is liable for breach of the agreement to the extent provided in the agreement or …

400.4A-301. Execution and execution date. — (a) A payment order is "executed" by the receiving bank when it issues a payment order intended to carry out the payment order received by the bank. A payment order received by the beneficiary's bank can be accepted but cannot be execut…

400.4A-302. Obligations of receiving bank in execution of payment order. — (a) Except as provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant to section 400.4A-209(a), the bank has the following obligations in executing the order: (1) Th…

400.4A-303. Erroneous execution of payment order. — (a) A receiving bank that (i) executes the payment order of the sender by issuing a payment order in an amount greater than the amount of the sender's order, or (ii) issues a payment order in execution of the sender's order and …

400.4A-304. Duty of sender to report erroneously executed payment order. — If the sender of a payment order that is erroneously executed as stated in section 400.4A-303 receives notification from the receiving bank that the order was executed or that the sender's account was debi…

400.4A-305. Liability for late or improper execution or failure to execute payment order. — (a) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of section 400.4A-302 results in delay in payment to the beneficiary, the bank is obli…