SB358,70,22
20(3) "Depositary bank" means the first bank to
which take an item
is transferred
21for collection even though it is also the
payor
payer bank
;, unless the item is
22presented for immediate payment over the counter.
SB358,70,24
23(4) "Intermediary bank" means
any
a bank to which an item is transferred in
24course of collection except the depositary or
payor
payer bank
;.
SB358,71,2
1(5) "Payor "Payer bank" means a bank
by which an item is payable as drawn
2or accepted; that is the drawee of a draft.
SB358,71,4
3(6) "Presenting bank" means
any
a bank presenting an item except a
payor 4payer bank
;.
SB358, s. 29
5Section
29. 404.105 (1) of the statutes is created to read:
SB358,71,86
404.105
(1) "Bank" means a person engaged in the business of banking,
7including a savings bank, savings and loan association, credit union or trust
8company.
SB358, s. 30
9Section
30. 404.105 (6) of the statutes is repealed.
SB358, s. 31
10Section
31. 404.106 to 404.108 of the statutes are renumbered 404.107 to
11404.109 and amended to read:
SB358,71,15
12404.107 Separate office of a bank. A branch or separate office of a bank is
13a separate bank for the purpose of computing the time within which and determining
14the place at or to which action may be taken or notices or orders
shall must be given
15under this chapter and under ch. 403.
SB358,71,20
16404.108 Time of receipt of items. (1) For the purpose of allowing time to
17process items, prove balances and make the necessary entries on its books to
18determine its position for the day, a bank may fix an afternoon hour of 2 p.m. or later
19as a
cut-off cutoff hour for the handling of money and items and the making of entries
20on its books.
SB358,71,23
21(2) Any An item or deposit of money received on any day after a
cut-off cutoff 22hour so fixed or after the close of the banking day may be treated as being received
23at the opening of the next banking day.
SB358,72,5
24404.109 Delays. (1) Unless otherwise instructed, a collecting bank in a good
25faith effort to secure payment
may, in the case of
a specific
items item drawn on a
1payer other than a bank, and with or without the approval of any person involved,
2may waive, modify or extend time limits imposed or permitted by chs. 401 to 411 for
3a period not
in excess of an exceeding 2 additional banking
day days without
4discharge of
secondary parties and without drawers or endorsers or liability to its
5transferor or
any a prior party.
SB358,72,11
6(2) Delay by a collecting bank or
payor payor bank beyond time limits
7prescribed or permitted by chs. 401 to 411 or by instructions is excused if
the delay
8is caused by interruption of communication
or computer facilities, suspension of
9payments by another bank, war, emergency conditions
, failure of equipment or other
10circumstances beyond the control of the bank
provided it and the bank exercises such
11diligence as the circumstances require.
SB358, s. 32
12Section
32. 404.106 of the statutes is created to read:
SB358,72,17
13404.106 Payable through or payable at bank; collecting bank. (1) If an
14item states that it is "payable through" a bank identified in the item, the item
15designates the bank as a collecting bank and does not by itself authorize the bank
16to pay the item and the item may be presented for payment only by or through the
17bank.
SB358,72,21
18(2) If an item states that it is "payable at" a bank identified in the item, the item
19designates the bank as a collecting bank and does not by itself authorize the bank
20to pay the item and the item may be presented for payment only by or through the
21bank.
SB358,72,23
22(3) If a draft names a nonbank drawee and it is unclear whether a bank named
23in the draft is a codrawee or a collecting bank, the bank is a collecting bank.
SB358, s. 33
24Section
33. 404.109 of the statutes is repealed.
SB358, s. 34
25Section
34. 404.110 of the statutes is created to read:
SB358,73,7
1404.110 Electronic presentment. (1) "Agreement for electronic
2presentment" means an agreement, clearinghouse rule or federal reserve regulation
3or operating circular, providing that presentment of an item may be made by
4transmission of an image of an item or information describing the item
5("presentment notice") rather than delivery of the item itself. The agreement may
6provide for procedures governing retention, presentment, payment, dishonor and
7other matters concerning items subject to the agreement.
SB358,73,9
8(2) Presentment of an item pursuant to an agreement for electronic
9presentment is made when the presentment notice is received.
SB358,73,12
10(3) If presentment is made by presentment notice, a reference to "item" or
11"check" in this chapter means the presentment notice unless the context otherwise
12indicates.
SB358, s. 35
13Section
35. 404.111 of the statutes is created to read:
SB358,73,16
14404.111 Statute of limitations. An action to enforce an obligation, duty, or
15right arising under this chapter must be commenced within 3 years after the cause
16of action accrues.
SB358, s. 36
17Section
36. The unnumbered subchapter title preceding 404.201 of the
18statutes is numbered subchapter II (title) of chapter 404.
SB358, s. 37
19Section
37. 404.201 of the statutes is amended to read:
SB358,74,10
20404.201 (title)
Presumption and duration of agency status Status of
21collecting banks bank as agent and provisional status of credits;
22applicability of chapter; item indorsed endorsed "pay any bank". (1) Unless
23a contrary intent clearly appears and
prior to before the time that a settlement given
24by a collecting bank for an item is or becomes final
(ss. 404.211 (3), 404.212 and
25404.213), the bank
, with respect to the item, is an agent or subagent of the owner of
1the item and any settlement given for the item is provisional. This provision applies
2regardless of the form of
indorsement endorsement or lack of
indorsement 3endorsement and even though credit given for the item is subject to immediate
4withdrawal as of right or is in fact withdrawn; but the continuance of ownership of
5an item by its owner and any rights of the owner to proceeds of the item are subject
6to rights of a collecting bank
, such as those resulting from outstanding advances on
7the item and
valid rights of
recoupment or setoff.
When If an item is handled by
8banks for purposes of presentment, payment
and, collection
or return, the relevant
9provisions of this chapter apply even though action of
the parties clearly establishes
10that a particular bank has purchased the item and is the owner of it.
SB358,74,13
11(2) After an item has been
indorsed
endorsed with the words "pay any bank"
12or the like, only a bank may acquire the rights of a holder
until any of the following
13occur:
SB358,74,1514
(a)
Until the The item has been returned to the customer initiating collection
;
15or.
SB358,74,1716
(b)
Until the The item has been specially
indorsed endorsed by a bank to a
17person who is not a bank.
SB358, s. 38
18Section
38. 404.202 (title) and (1) (intro.) and (a) to (c) of the statutes are
19amended to read:
SB358,74,22
20404.202 (title)
Responsibility for collection or return; when action
21seasonable timely.
(1) (intro.) A collecting bank must
use exercise ordinary care
22in
all of the following:
SB358,74,2323
(a) Presenting an item or sending it for presentment
; and.
SB358,75,3
1(b) Sending notice of dishonor or nonpayment or returning an item other than
2a documentary draft to the bank's transferor after learning that the item has not
3been paid or accepted, as the case may be
; and.
SB358,75,44
(c) Settling for an item when the bank receives final settlement
; and.
SB358, s. 39
5Section
39. 404.202 (1) (d) of the statutes is repealed.
SB358, s. 40
6Section
40. 404.202 (1) (e) of the statutes is renumbered 404.202 (1) (d).
SB358, s. 41
7Section
41. 404.202 (2) and (3) of the statutes are amended to read:
SB358,75,148
404.202
(2) A collecting bank
taking proper action before its midnight deadline
9following receipt of an item, notice or payment acts seasonably; taking proper action
10within a reasonably longer time may be seasonable but the bank has the burden of
11so establishing exercises ordinary care under sub. (1) by taking proper action before
12its midnight deadline following receipt of an item, notice or settlement. Taking
13proper action within a reasonably longer time may constitute the exercise of ordinary
14care, but the bank has the burden of establishing timeliness.
SB358,75,17
15(3) Subject to sub. (1) (a), a bank is not liable for the insolvency, neglect,
16misconduct, mistake or default of another bank or person or for loss or destruction
17of an item
in the possession of others or in transit
or in the possession of others.
SB358, s. 42
18Section
42. 404.203 of the statutes is amended to read:
SB358,75,25
19404.203 Effect of instructions. Subject to
the provisions of s. 403.419 to s.
20403.420 concerning conversion of instruments and
the provisions of both ch. 403 and
21this chapter to s. 403.206 concerning restrictive
indorsements endorsements, only a
22collecting bank's transferor can give instructions
which that affect the bank or
23constitute notice to it and a collecting bank is not liable to prior parties for any action
24taken pursuant to
such the instructions or in accordance with any agreement with
25its transferor.
SB358, s. 43
1Section
43. 404.204 of the statutes is amended to read:
SB358,76,6
2404.204 (title)
Methods of sending and presenting; sending direct
3directly to payor
payer bank. (1) A collecting bank
must shall send items by
a 4reasonably prompt method
, taking into consideration
any relevant instructions, the
5nature of the item, the number of
such those items on hand,
and the cost of collection
6involved and the method generally used by it or others to present
such those items.
SB358,76,7
7(2) A collecting bank may send
any of the following:
SB358,76,88
(a)
Any An item
direct directly to the
payor payer bank
;.
SB358,76,109
(b)
Any An item to
any a nonbank
payor payer if authorized by its transferor
;
10and.
SB358,76,1311
(c)
Any An item other than documentary drafts to
any a nonbank
payor payer,
12if authorized by federal reserve regulation or operating
letter circular, clearinghouse
13rule or the like.
SB358,76,15
14(3) Presentment may be made by a presenting bank at a place where the
payor 15payer bank
or other payer has requested that presentment be made.
SB358, s. 44
16Section
44. 404.205 of the statutes is repealed and recreated to read:
SB358,76,18
17404.205 Depositary bank holder of unendorsed item. If a customer
18delivers an item to a depositary bank for collection, all of the following apply:
SB358,76,22
19(1) The depositary bank becomes a holder of the item at the time that it receives
20the item for collection if the customer at the time of delivery was a holder of the item,
21whether or not the customer endorses the item, and, if the bank satisfies the other
22requirements of s. 403.302, it is a holder in due course.
SB358,76,25
23(2) The depositary bank warrants to collecting banks, the payer bank or other
24payer and the drawer that the amount of the item was paid to the customer or
25deposited to the customer's account.
SB358, s. 45
1Section
45. 404.206 of the statutes is amended to read:
SB358,77,3
2404.206 Transfer between banks. Any agreed method
which that identifies
3the transferor bank is sufficient for the item's further transfer to another bank.
SB358, s. 46
4Section
46. 404.207 of the statutes is repealed and recreated to read:
SB358,77,7
5404.207 Transfer warranties. (1) A customer or collecting bank that
6transfers an item and receives a settlement or other consideration warrants all of the
7following to the transferee and to any subsequent collecting bank:
SB358,77,88
(a) The warrantor is a person entitled to enforce the item.
SB358,77,99
(b) All signatures on the item are authentic and authorized.
SB358,77,1010
(c) The item has not been altered.
SB358,77,1211
(d) The item is not subject to a defense or claim in recoupment of any party that
12can be asserted against the warrantor.
SB358,77,1513
(e) The warrantor has no knowledge of any insolvency proceeding commenced
14with respect to the maker or acceptor or, in the case of an unaccepted draft, the
15drawer.
SB358,77,23
16(2) If an item is dishonored, a customer or collecting bank transferring the item
17and receiving settlement or other consideration is obliged to pay the amount due on
18the item according to the terms of the item at the time it was transferred or, if the
19transfer was of an incomplete item, according to its terms when completed as stated
20in ss. 403.115 and 403.407. The obligation of a transferor is owed to the transferee
21and to any subsequent collecting bank that takes the item in good faith. A transferor
22cannot disclaim its obligation under this subsection by an endorsement stating that
23it is made "without recourse" or otherwise disclaiming liability.
SB358,78,3
24(3) A person to whom the warranties under sub. (1) are made and who took the
25item in good faith may recover from the warrantor as damages for breach of warranty
1an amount equal to the loss suffered as a result of the breach, but not more than the
2amount of the item plus expenses and loss of interest incurred as a result of the
3breach.
SB358,78,8
4(4) The warranties stated in sub. (1) cannot be disclaimed with respect to
5checks. Unless notice of a claim for breach of warranty is given to the warrantor
6within 30 days after the claimant has reason to know of the breach and the identity
7of the warrantor, the warrantor is discharged to the extent of any loss caused by the
8delay in giving notice of the claim.
SB358,78,10
9(5) A cause of action for breach of warranty under this section accrues when
10the claimant has reason to know of the breach.
SB358, s. 47
11Section
47. 404.208 of the statutes is renumbered 404.210, and 404.210 (1)
12(intro.), (a) and (b), (2) and (3) (intro.), (a) and (b), as renumbered, are amended to
13read:
SB358,78,1514
404.210
(1) (intro.) A
collecting bank has a security interest in an item and any
15accompanying documents or the proceeds of either
in any of the following situations:
SB358,78,1716
(a) In case of an item deposited in an account
, to the extent to which credit given
17for the item has been withdrawn or applied
;.
SB358,78,2018
(b) In case of an item for which it has given credit available for withdrawal as
19of right, to the extent of the credit given
, whether or not the credit is drawn upon
and
20whether or
not there is a right of charge-back
; or.
SB358,78,24
21(2) When If credit
which has been given for several items received at one time
22or pursuant to a single agreement is withdrawn or applied in part
, the security
23interest remains upon all the items, any accompanying documents or the proceeds
24of either. For the purpose of this section, credits first given are first withdrawn.
SB358,79,6
1(3) (intro.) Receipt by a collecting bank of a final settlement for an item is a
2realization on its security interest in the item, accompanying documents and
3proceeds.
To the extent and so So long as the bank does not receive final settlement
4for the item or give up possession of the item or accompanying documents for
5purposes other than collection, the security interest continues
to that extent and is
6subject to
the provisions of ch. 409
except that, but all of the following apply:
SB358,79,87
(a) No security agreement is necessary to make the security interest
8enforceable
(s. 409.203 (1) (a)); and.
SB358,79,99
(b) No filing is required to perfect the security interest
; and.
SB358, s. 48
10Section
48. 404.208 of the statutes is created to read:
SB358,79,15
11404.208 Presentment warranties. (1) If an unaccepted draft is presented
12to the drawee for payment or acceptance and the drawee pays or accepts the draft,
13the person obtaining payment or acceptance, at the time of presentment, and a
14previous transferor of the draft, at the time of transfer, warrant to the drawee that
15pays or accepts the draft in good faith that all of the following conditions exist:
SB358,79,1816
(a) The warrantor is, or was at the time the warrantor transferred the draft,
17a person entitled to enforce the draft or authorized to obtain payment or acceptance
18of the draft on behalf of a person entitled to enforce the draft.
SB358,79,1919
(b) The draft has not been altered.
SB358,79,2120
(c) The warrantor has no knowledge that the signature of the purported drawer
21of the draft is unauthorized.
SB358,80,6
22(2) A drawee making payment may recover from a warrantor damages for
23breach of warranty equal to the amount paid by the drawee less the amount the
24drawee received or is entitled to receive from the drawer because of the payment.
25In addition, the drawee is entitled to compensation for expenses and loss of interest
1resulting from the breach. The right of the drawee to recover damages under this
2subsection is not affected by any failure of the drawee to exercise ordinary care in
3making payment. If the drawee accepts the draft, breach of warranty is a defense
4to the obligation of the acceptor, and if the acceptor makes payment with respect to
5the draft, the acceptor is entitled to recover from a warrantor for breach of warranty
6the amounts stated in this subsection.
SB358,80,11
7(3) If a drawee asserts a claim for breach of warranty under sub. (1) based on
8an unauthorized endorsement of the draft or an alteration of the draft, the warrantor
9may defend by proving that the endorsement is effective under s. 403.404 or 403.405
10or the drawer is precluded under s. 403.406 or 404.406 from asserting against the
11drawee the unauthorized endorsement or alteration.
SB358,80,20
12(4) If a dishonored draft is presented for payment to the drawer or an endorser
13or any other item is presented for payment to a party obliged to pay the item, and the
14item is paid, the person obtaining payment and a prior transferor of the item warrant
15to the person making payment in good faith that the warrantor is, or was at the time
16the warrantor transferred the item, a person entitled to enforce the item or
17authorized to obtain payment on behalf of a person entitled to enforce the item. The
18person making payment may recover from any warrantor for breach of warranty an
19amount equal to the amount paid plus expenses and loss of interest resulting from
20the breach.
SB358,80,25
21(5) The warranties stated in subs. (1) and (4) cannot be disclaimed with respect
22to checks. Unless notice of a claim for breach of warranty is given to the warrantor
23within 30 days after the claimant has reason to know of the breach and the identity
24of the warrantor, the warrantor is discharged to the extent of any loss caused by the
25delay in giving notice of the claim.
SB358,81,2
1(6) A cause of action for breach of warranty under this section accrues when
2the claimant has reason to know of the breach.
SB358, s. 49
3Section
49. 404.209 of the statutes is renumbered 404.211 and amended to
4read:
SB358,81,8
5404.211 When bank gives value for purposes of holder in due course. 6For purposes of determining its status as a holder in due course,
the a bank has given
7value to the extent that it has a security interest in an item
provided that, if the bank
8otherwise complies with s. 403.302 on what constitutes a holder in due course.
SB358, s. 50
9Section
50. 404.209 of the statutes is created to read:
SB358,81,14
10404.209 Encoding and retention warranties. (1) A person who encodes
11information on or with respect to an item after issue warrants to any subsequent
12collecting bank and to the payer bank or other payer that the information is correctly
13encoded. If the customer of a depositary bank encodes, that bank also makes the
14warranty.
SB358,81,19
15(2) A person who undertakes to retain an item pursuant to an agreement for
16electronic presentment warrants to any subsequent collecting bank and to the payer
17bank or other payer that retention and presentment of the item comply with the
18agreement. If a customer of a depositary bank undertakes to retain an item, that
19bank also makes this warranty.