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44. 404.205 of the statutes is repealed and recreated to read: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46. 404.207 of the statutes is repealed and recreated to read: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.
SB358,81,23
20(3) A person to whom warranties are made under this section and who took the
21item in good faith may recover from the warrantor as damages for breach of warranty
22an amount equal to the loss suffered as a result of the breach, plus expenses and loss
23of interest incurred as a result of the breach.
SB358, s. 51
24Section
51. 404.210 of the statutes is renumbered 404.212 and amended to
25read:
SB358,82,8
1404.212 (title)
Presentment by notice of item not payable by, through
2or at a bank; liability of secondary parties
drawer or endorser. (1) Unless
3otherwise instructed, a collecting bank may present an item not payable by, through
4or at a bank by sending to the party to accept or pay a written notice that the bank
5holds the item for acceptance or payment. The notice must be sent in time to be
6received on or before the day when presentment is due and the bank must meet any
7requirement of the party to accept or pay under s.
403.505 403.501 by the close of the
8bank's next banking day after it knows of the requirement.
SB358,82,15
9(2) Where If presentment is made by notice and
neither honor nor payment,
10acceptance or request for compliance with a requirement under s.
403.505 403.501 11is
not received by the close of business on the day after maturity or
, in the case of
12demand items
, by the close of business on the
third 3rd banking day after notice was
13sent, the presenting bank may treat the item as dishonored and charge any
14secondary party drawer or endorser by sending
the secondary party it notice of the
15facts.
SB358, s. 52
16Section
52. 404.211 of the statutes is repealed.
SB358, s. 53
17Section
53. 404.212 (title), (1) and (2) to (5) of the statutes are renumbered
18404.214 (title), (1) and (3) to (6), and 404.214 (title), (1), (3), (4) and (6), as
19renumbered, are amended to read:
SB358,83,8
20404.214 (title)
Right of charge-back or refund; liability of collecting
21bank; return of item. (1) If a collecting bank has made provisional settlement with
22its customer for an item and
itself fails by reason of dishonor, suspension of payments
23by a bank or otherwise to receive
a settlement for the item which is or becomes final,
24the bank may revoke the settlement given by it,
charge-back charge back the amount
25of any credit given for the item to its customer's account
, or obtain refund from its
1customer
, whether or not it is able to return the
items item, if by its midnight
2deadline or within a longer reasonable time after it learns the facts it returns the
3item or sends notification of the facts.
If the return or notice is delayed beyond the
4bank's midnight deadline or a longer reasonable time after it learns the facts, the
5bank may revoke the settlement, charge back the credit or obtain a refund from its
6customer, but it is liable for any loss resulting from the delay. These rights to revoke,
7charge-back and obtain refund terminate if and when a settlement for the item
8received by the bank is or becomes final
(ss. 404.211 (3) and 404.213 (2) and (3)).
SB358,83,12
9(3) A depositary bank
which that is also the
payor payer may
charge-back 10charge back the amount of an item to its customer's account or obtain refund in
11accordance with s. 404.301 governing return of an item received by a
payor payer 12bank for credit on its books.
SB358,83,13
13(4) The right to charge-back is not affected by
any of the following:
SB358,83,1414
(a)
Prior Previous use of
the a credit given for the item
; or
.
SB358,83,1615
(b) Failure by any bank to exercise ordinary care with respect to the item
, but
16any a bank so failing remains liable.
SB358,83,21
17(6) If credit is given in dollars as the equivalent of the value of an item payable
18in a foreign
currency money, the dollar amount of any charge-back or refund
shall 19must be calculated on the basis of the
buying sight bank-offered spot rate for the
20foreign
currency money prevailing on the day when the person entitled to the
21charge-back or refund learns that it will not receive payment in ordinary course.
SB358, s. 54
22Section
54. 404.212 (1m) of the statutes is repealed.
SB358, s. 55
23Section
55. 404.213 (title) and (1) (intro.), (a), (b) and (d) of the statutes are
24renumbered 404.215 (title) and (1) (intro.), (a), (b) and (c), and 404.215 (title) and (1)
25(intro.) and (a) and (b), as renumbered, are amended to read:
SB358,84,4
1404.215 (title)
Final payment of item by payor payer bank; when
2provisional debits and credits become final; when certain credits become
3available for withdrawal. (1) (intro.) An item is finally paid by a
payor payer 4bank when the bank has
first done any of the following
, whichever happens first:
SB358,84,55
(a) Paid the item in cash
; or.
SB358,84,86
(b) Settled for the item without
reserving having a right to revoke the
7settlement
and without having such right under statute, clearinghouse rule or
8agreement
; or.
SB358, s. 56
9Section
56. 404.213 (1) (c) of the statutes is repealed.
SB358, s. 57
10Section
57. 404.213 (1a) of the statutes is repealed.
SB358, s. 58
11Section
58. 404.213 (2) to (4), (4m) and (5) of the statutes are renumbered
12404.215 (3) to (5), (5m) and (6), and 404.215 (3), (4), (5), (5m) (a) and (b) 1., 2. and 3.
13and (6), as renumbered, are amended to read:
SB358,84,1914
404.215
(3) If provisional settlement for an item between the presenting and
15payor payer banks is made through a clearinghouse or by debits or credits in an
16account between them, then to the extent that provisional debits or credits for the
17item are entered in accounts between the presenting and
payor payer banks or
18between the presenting and successive prior collecting banks in a series, they become
19final upon final payment of the item by the
payor
payer bank.
SB358,84,2320
404.215
(4) If a collecting bank receives a settlement for an item which is or
21becomes final
(ss. 404.211 (3) and 404.213 (2)), the bank is accountable to its
22customer for the amount of the item and any provisional credit given for the item in
23an account with its customer becomes final.
SB358,85,2
24(5) Subject to
applicable law stating a time for availability of funds and to any
25right of the bank to apply the credit to an obligation of the customer, credit given by
1a bank for an item in
an a customer's account
with its customer becomes available
2for withdrawal as of right:
SB358,85,63
(a)
In any case where If the bank has received a provisional settlement for the
4item,
—when such when the settlement becomes final and the bank has had a
5reasonable time to
learn that the settlement is final;
receive return of the item and
6the item has not been received within that time.
SB358,85,97
(b)
In any case where If the bank is both
a the depositary bank and
a payor the
8payer bank and the item is finally paid,
—at
at the opening of the bank's
second 2nd 9banking day following receipt of the item.
SB358,85,11
10(5m) (a)
As used in In this subsection, "banking day" means a business day as
11defined in s. 421.301 (6) that is not a federal legal holiday.
SB358,85,1712
(b) 1. If the item is a check or draft endorsed only by the person to whom it was
13issued and is drawn on the treasury of the United States,
the this state
of Wisconsin 14or any unit of local government
located in this state, after not more than one banking
15day has intervened between the banking day on which the check or draft is received
16at the proof and transit facility of the depository and the banking day on which the
17funds are available for withdrawal.
SB358,85,2118
2. If the
payor payer bank or other financial institution is located in this state,
19after not more than 4 banking days have intervened between the banking day on
20which the item is received at the proof and transit facility of the depository and the
21banking day on which the funds are available for withdrawal.
SB358,85,2522
3. If the
payor payer bank or other financial institution is located in any other
23state, after not more than 7 banking days have intervened between the banking day
24on which the item is received at the proof and transit facility of the depository and
25the banking day on which the funds are available for withdrawal.
SB358,86,5
1(6) A deposit of money in a bank is final when made but, subject to Subject to
2applicable law stating a time for availability of funds and any right of
the a bank to
3apply
the a deposit to an obligation of the
customer, the depositor, a deposit
of money 4becomes available for withdrawal as of right at the opening of the bank's next
5banking day
following after receipt of the deposit.
SB358, s. 59
6Section
59. 404.213 of the statutes is created to read:
SB358,86,10
7404.213 Medium and time of settlement by bank. (1) With respect to
8settlement by a bank, the medium and time of settlement may be prescribed by
9federal reserve regulations or circulars, clearinghouse rules and the like, or
10agreement. In the absence of such prescription, all of the following apply:
SB358,86,1211
(a) The medium of settlement is cash or credit to an account in a federal reserve
12bank of or specified by the person to receive settlement.
SB358,86,1313
(b) The time of settlement is:
SB358,86,1514
1. With respect to tender of settlement by cash, a cashier's check, or teller's
15check, when the cash or check is sent or delivered.
SB358,86,1716
2. With respect to tender of settlement by credit in an account in a federal
17reserve bank, when the credit is made.
SB358,86,2018
3. With respect to tender of settlement by a credit or debit to an account in a
19bank, when the credit or debit is made or, in the case of tender of settlement by
20authority to charge an account, when the authority is sent or delivered.
SB358,86,2221
4. With respect to tender of settlement by a funds transfer, when payment is
22made pursuant to s. 410.406 (1) to the person receiving settlement.
SB358,86,25
23(2) If the tender of settlement is not by a medium authorized by sub. (1) or the
24time of settlement is not fixed by sub. (1), no settlement occurs until the tender of
25settlement is accepted by the person receiving settlement.
SB358,87,2
1(3) If settlement for an item is made by cashier's check or teller's check and the
2person receiving settlement, before its midnight deadline does any of the following:
SB358,87,43
(a) Presents or forwards the check for collection, settlement is final when the
4check is finally paid.
SB358,87,65
(b) Fails to present or forward the check for collection, settlement is final at the
6midnight deadline of the person receiving settlement.
SB358,87,10
7(4) If settlement for an item is made by giving authority to charge the account
8of the bank giving settlement in the bank receiving settlement, settlement is final
9when the charge is made by the bank receiving settlement if there are funds
10available in the account for the amount of the item.
SB358, s. 60
11Section
60. 404.214 of the statutes is renumbered 404.216 and amended to
12read:
SB358,87,17
13404.216 Insolvency and preference. (1)
Any If an item
is in or
coming 14comes into the possession of a
payor
payer or collecting bank
which that suspends
15payment and
which the item
is has not
been finally paid
shall, the item must be
16returned by the receiver, trustee or agent in charge of the closed bank to the
17presenting bank or the closed bank's customer.