Chapter 74 — Chapter 74

ORS 74.1010 Short title. This chapter may be cited as Uniform Commercial Code–Bank Deposits and Collections. [1961 c.726 §74.1010]

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ORS 74.1020 Applicability. (1) To the extent that items within this chapter are also within ORS chapters 73 and 78, they are subject to those chapters. If there is conflict, this chapter and ORS chapter 78 govern ORS chapter 73

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ORS 74.1030 Variation by agreement; measure of damages; action constituting ordinary care. (1) The effect of the provisions of this chapter 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. However, the parties may determine by agreement the standards by which the bank’s responsibility is to be measured if those standards are not manifestly unreasonable

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ORS 74.1040 Definitions and index of definitions. (1) In this chapter, unless the context otherwise requires

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ORS 74.1050 “Bank”; “depositary bank”; “intermediary bank”; “collecting bank”; “payor bank”; “presenting bank.” In this chapter

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ORS 74.1060 Payable through or payable at bank; collecting bank. (1) If an item states that it is “payable through” a bank identified in the item

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ORS 74.1070 Separate office of bank for computing time for actions, notices and orders. A bank or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders must be given under this chapter and ORS chapter 73. [1961 c.726 §74.1070; 1993 c.545 §78]

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ORS 74.1080 Time of receipt of items. (1) For the purpose of allowing time to process items, prove balances and make the necessary entries on its books to determine its position for a day, a bank may fix an afternoon hour of 2 p.m. or later as a cutoff hour for the handling of money and items and the making of entries on its books

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ORS 74.1090 Waiver of time limits; when delay excused. (1) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment of a specific item drawn on a payor other than a bank, and with or without the approval of any person involved, may waive, modify or extend time limits imposed or permitted by the Uniform Commercial Code for a period not exceeding two additional banking days without discharge of drawers or indorsers or liability to its transferor or a prior party

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ORS 74.1110 Statute of limitations. An action to enforce an obligation, duty or right arising under this chapter must be commenced within three years after the claim for relief accrues. [1993 c.545 §83]

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ORS 74.1120 Electronic presentment. (1) “Agreement for electronic presentment” means an agreement, clearing house rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may be made by transmission of an image of an item or information describing the item (“presentment notice”) rather than delivery of the item itself. The agreement may provide for procedures governing retention, presentment, payment, dishonor and other matters concerning items subject to the agreement

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ORS 74.2010 Status of collecting bank as agent and provisional status of credits; applicability of chapter; item indorsed “pay any bank.” (1) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final the bank, with respect to the item, is an agent or subagent of the owner of the item and any settlement given for the item is provisional. This provision applies regardless of the form of indorsement or lack of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such as those resulting from outstanding advances on the item and rights of recoupment or setoff. If an item is handled by banks for purposes of presentment, payment, collection or return, the relevant provisions of this chapter apply even though action of the parties clearly establishes that a particular bank has purchased the item and is the owner of it

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ORS 74.2020 Responsibility for collection; when action timely. (1) A collecting bank must exercise ordinary care in

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ORS 74.2030 Effect of instructions. Subject to ORS 73.0420 concerning conversion of instruments and ORS chapter 73 and this chapter concerning restrictive indorsements, only a collecting bank’s transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions or in accordance with any agreement with its transferor. [1961 c.726 §74.2030; 1993 c.545 §86]

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ORS 74.2040 Methods of sending and presenting; presentment. (1) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items

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ORS 74.2050 Depositary bank as holder of unindorsed item. If a customer delivers an item to a depositary bank for collection

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ORS 74.2060 Transfer between banks. Any agreed method that identifies the transferor bank is sufficient for the item’s further transfer to another bank. [1961 c.726 §74.2060; 1993 c.545 §89]

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ORS 74.2070 Warranties of customer and collecting bank on transfer of item; dishonor of item; remedies; when claim accrues. (1) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that

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ORS 74.2080 Presentment warranties; remedies; defenses; payment of dishonored draft; warranty disclaimer not applicable to checks; when warranty claim accrues. (1) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, the person obtaining payment or acceptance, at the time of presentment, and a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the draft in good faith that

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ORS 74.2090 Encoding and retention warranties; remedies. (1) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the payor bank or other payor that the information is correctly encoded. If the customer of a depositary bank encodes, that bank also makes the warranty

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ORS 74.2100 Security interest of collecting bank in items; priority. (1) A collecting bank has a security interest in an item and in any accompanying documents or in the proceeds of either

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ORS 74.2110 Bank as 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 ORS 73.0302 on what constitutes a holder in due course. [1961 c.726 §74.2110; 1993 c.545 §94]

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ORS 74.2120 Presentment by notice of item not payable by, through or at bank; liability of drawer or indorser. (1) 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 that the bank holds the item for acceptance or payment. The notice must be sent in time to be received on or before the day when presentment is due and the bank must meet any requirement of the party to accept or pay under ORS 73.0501 by the close of the bank’s next banking day after it knows of the requirement

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ORS 74.2130 Medium and time of settlement by bank. (1) 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

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ORS 74.2140 Right of charge-back or refund; liability of collecting bank; return of item. (1) 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 a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer’s account or obtain refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank’s midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit or obtain refund from its customer, but it is liable for any loss resulting from the delay. The rights to revoke, charge back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final

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ORS 74.2150 Final payment of item by payor bank; when provisional debits and credits become final; when certain credits become available for withdrawal. (1) An item is finally paid by a payor bank when the bank has first done any of the following

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ORS 74.2160 Insolvency and preference. (1) 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 presenting bank or the closed bank’s customer

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ORS 74.3010 Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank. (1) 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 of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it

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ORS 74.3020 Payor bank’s responsibility for late return of item; defenses to liability of payor bank. (1) Pursuant to ORS 74.2070 (1), if an item is presented to and received by a payor bank, the bank is accountable for the amount of

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ORS 74.3030 When items subject to notice, stop payment order, legal process or setoff; order in which items may be charged or certified; cutoff hour for checks. (1) Any knowledge, notice or stop payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend or modify the bank’s right or duty to pay an item or to charge its customer’s account for the item if the knowledge, notice, stop payment order or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following

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ORS 74.4010 When bank may charge customer’s account. (1) 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 accordance with any agreement between the customer and bank

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ORS 74.4020 Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account. (1) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable. However, a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft

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ORS 74.4030 Customer’s right to stop payment; duration of stop payment order; burden of proof of loss. (1) 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 ORS 74.3030. 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

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ORS 74.4040 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, which is presented more than six months after its date, but it may charge its customer’s account for a payment made thereafter in good faith. [1961 c.726 §74.4040]

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ORS 74.4050 Death or incompetence of customer. (1) 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 the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes the authority to accept, pay, collect or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it

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ORS 74.4060 Statements to customer; requirements; retaining copies of items; duty of customer to determine unauthorized payment; allocation of loss. (1) 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 provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount and date of payment

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ORS 74.4070 Payor bank’s right to subrogation on 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, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank shall be subrogated to the rights

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ORS 74.500 [Renumbered 165.655]

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ORS 74.5010 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 been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right. [1961 c.726 §74.5010; 1993 c.545 §110]

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ORS 74.5020 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 to pay or accept because the goods have not arrived is not dishonor; the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods. [1961 c.726 §74.5020; 1993 c.545 §111]

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ORS 74.5030 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 ORS chapter 75, a bank presenting a documentary draft

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ORS 74.5040 Privilege of presenting bank to deal with goods; security interest for expenses. (1) 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 otherwise deal with the goods in any reasonable manner

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ORS 74.510 [Renumbered 165.660]

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ORS 74.520 [Renumbered 165.665]

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ORS 74.530 [Renumbered 165.670]

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ORS 74.540 [Renumbered 165.675]

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ORS 74.550 [Renumbered 165.680]

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