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.
SB358,87,21 18(2) If a payor payer bank finally pays an item and suspends payments without
19making a settlement for the item with its customer or the presenting bank which
20settlement is or becomes final, the owner of the item has a preferred claim against
21the payor payer bank.
SB358,88,2 22(3) If a payor payer bank gives or a collecting bank gives or receives a
23provisional settlement for an item and thereafter suspends payments, the
24suspension does not prevent or interfere with the settlement settlement's becoming

1final if such the finality occurs automatically upon the lapse of certain time or the
2happening of certain events (ss. 404.211 (3) and 404.213 (1) (d), (2) and (3)).
SB358,88,6 3(4) If a collecting bank receives from subsequent parties settlement for an item,
4which settlement is or becomes final and the bank suspends payments without
5making a settlement for the item with its customer which settlement is or becomes
6final, the owner of the item has a preferred claim against such the collecting bank.
SB358, s. 61 7Section 61. 404.214 (2) of the statutes is created to read:
SB358,88,98 404.214 (2) A collecting bank returns an item when it is sent or delivered to the
9bank's customer or transferor or pursuant to its instructions.
SB358, s. 62 10Section 62. 404.215 (2) of the statutes is created to read:
SB358,88,1211 404.215 (2) If provisional settlement for an item does not become final, the item
12is not finally paid.
SB358, s. 63 13Section 63. The unnumbered subchapter title preceding 404.301 of the
14statutes is numbered subchapter III (title) of chapter 404 and amended to read:
SB358,88,1715 Subchapter III
16 Collection of items: payor
17payer banks
SB358, s. 64 18Section 64. 404.301 of the statutes is amended to read:
SB358,89,2 19404.301 (title) Deferred posting; recovery of payment by return of
20items; time of dishonor
; return of items by payer bank. (1) Where an
21authorized settlement
If a payor bank settles for a demand item (other than a
22documentary draft) received by a payor bank presented otherwise than for
23immediate payment over the counter has been made before midnight of the banking
24day of receipt, the payor payer bank may revoke the settlement and recover any

1payment
the settlement if, before it has made final payment (s. 404.213 (1)) and
2before its midnight deadline, it does any of the following:
SB358,89,33 (a) Returns the item; or.
SB358,89,54 (b) Sends written notice of dishonor or nonpayment if the item is held for
5protest or is otherwise
unavailable for return.
SB358,89,9 6(2) If a demand item is received by a payor payer bank for credit on its books,
7it may return such the item or send notice of dishonor and may revoke any credit
8given or recover the amount thereof withdrawn by its customer, if it acts within the
9time limit and in the manner specified in sub. (1).
SB358,89,12 10(3) Unless previous notice of dishonor has been sent , an item is dishonored at
11the time when for purposes of dishonor it is returned or notice sent in accordance with
12this section.
SB358,89,13 13(4) An item is returned:
SB358,89,1614 (a) As to an item received presented through a clearinghouse, when it is
15delivered to the presenting or last collecting bank or to the clearinghouse or is sent
16or delivered in accordance with its clearinghouse rules; or.
SB358,89,1817 (b) In all other cases, when it is sent or delivered to the bank's customer or
18transferor or pursuant to the customer's or transferor's instructions.
SB358, s. 65 19Section 65. 404.302 (title) of the statutes is amended to read:
SB358,89,20 20404.302 (title) Payor Payer bank's responsibility for late return of item.
SB358, s. 66 21Section 66. 404.302 of the statutes is renumbered 404.302 (1) and amended
22to read:
SB358,90,223 404.302 (1) In the absence of a valid defense such as breach of a presentment
24warranty under s. 404.207 (1), settlement effected or the like, if
If an item is

1presented on to and received by a payor payer bank, the bank is accountable for the
2amount of any of the following:
SB358,90,73 (a) A demand item, other than a documentary draft , whether properly payable
4or not, if the bank, in any case where in which it is not also the depositary bank,
5retains the item beyond midnight of the banking day of receipt without settling for
6it or, regardless of whether or not it is also the depositary bank, does not pay or return
7the item or send notice of dishonor until after its midnight deadline ; or.
SB358,90,108 (b) Any other properly payable item, unless within the time allowed for
9acceptance or payment of that item, the bank either accepts or pays the item or
10returns it and accompanying documents.
SB358, s. 67 11Section 67. 404.302 (2) of the statutes is created to read:
SB358,90,1512 404.302 (2) The liability of a payer bank to pay an item under sub. (1) is subject
13to defenses based on breach of a presentment warranty or proof that the person
14seeking enforcement of the liability presented or transferred the item for the purpose
15of defrauding the payer bank.
SB358, s. 68 16Section 68. 404.303 (title) and (1) (intro.) and (a) to (c) of the statutes are
17amended to read:
SB358,91,2 18404.303 (title) When items subject to notice, stop-order stop-payment
19order
, legal process or setoff; order in which items may be charged or
20certified.
(1) (intro.) Any knowledge, notice or stop-order stop-payment order
21received by, legal process served upon or setoff exercised by a payor payer bank,
22whether or not effective under other rules of law
comes too late to terminate, suspend
23or modify the bank's right or duty to pay an item or to charge its customer's account
24for the item, comes too late to so terminate, suspend or modify such right or duty if
25the knowledge, notice, stop-order stop-payment order or legal process is received or

1served and a reasonable time for the bank to act thereon expires or the setoff is
2exercised after the bank has done any earliest of the following:
SB358,91,33 (a) Accepted or certified The bank accepts or certifies the item;.
SB358,91,44 (b) Paid The bank pays the item in cash;.
SB358,91,75 (c) Settled The bank settles for the item without reserving having a right to
6revoke the settlement and without having such right under statute, clearinghouse
7rule or agreement;.
SB358, s. 69 8Section 69. 404.303 (1) (d) of the statutes is repealed.
SB358, s. 70 9Section 70. 404.303 (1) (e) of the statutes is renumbered 404.303 (1) (d) and
10amended to read:
SB358,91,1311 404.303 (1) (d) Become The bank becomes accountable for the amount of the
12item under ss. 404.213 (1) (d) and s. 404.302 dealing with the payor payer bank's
13responsibility for late return of items.
SB358, s. 71 14Section 71. 404.303 (1) (e) of the statutes is created to read:
SB358,91,1915 404.303 (1) (e) With respect to checks, a cutoff hour no earlier than one hour
16after the opening of the next banking day after the banking day on which the bank
17received the check and no later than the close of that next banking day or, if no cutoff
18hour is fixed, the close of the next banking day after the banking day on which the
19bank received the check.
SB358, s. 72 20Section 72. 404.303 (2) of the statutes is amended to read:
SB358,91,2221 404.303 (2) Subject to sub. (1), items may be accepted, paid, certified or charged
22to the indicated account of its customer in any order convenient to the bank.
SB358, s. 73 23Section 73. The unnumbered subchapter title preceding 404.401 of the
24statutes is numbered subchapter IV (title) of chapter 404 and amended to read:
SB358,92,3
1Subchapter IV
2 Relationship between payor payer
3 bank and its customer
SB358, s. 74 4Section 74. 404.401 (1) of the statutes is amended to read:
SB358,92,95 404.401 (1) As against its customer, a A bank may charge against the
6customer's account any of a customer an item which that is otherwise properly
7payable from that account even though the charge creates an overdraft. An item is
8properly payable if it is authorized by the customer and is in accordance with any
9agreement between the customer and bank.
SB358, s. 75 10Section 75. 404.401 (2) of the statutes is renumbered 404.401 (4) and amended
11to read:
SB358,92,1312 404.401 (4) A bank which that in good faith makes payment to a holder may
13charge the indicated account of its customer according to any of the following:
SB358,92,1414 (a) The original tenor terms of the customer's altered item; or.
SB358,92,1715 (b) The tenor terms of the customer's completed item, even though the bank
16knows the item has been completed unless the bank has notice that the completion
17was improper.
SB358, s. 76 18Section 76. 404.401 (2) and (3) of the statutes are created to read:
SB358,92,2019 404.401 (2) A customer is not liable for the amount of an overdraft if the
20customer neither signed the item nor benefited from the proceeds of the item.
SB358,93,6 21(3) A bank may charge against the account of a customer a check that is
22otherwise properly payable from the account, even though payment was made before
23the date of the check, unless the customer has given notice to the bank of the
24postdating describing the check with reasonable certainty. The notice is effective for
25the period stated in s. 404.403 (2) for stop-payment orders, and must be received at

1such time and in such manner as to afford the bank a reasonable opportunity to act
2on it before the bank takes any action with respect to the check described in s.
3404.303. If a bank charges against the account of a customer a check before the date
4stated in the notice of postdating, the bank is liable for damages for the loss resulting
5from its act. The loss may include damages for dishonor of subsequent items under
6s. 404.402.
SB358, s. 77 7Section 77. 404.402 (title) of the statutes is amended to read:
SB358,93,9 8404.402 (title) Bank's liability to customer for wrongful dishonor; time
9of determining insufficiency of account
.
SB358, s. 78 10Section 78. 404.402 of the statutes is renumbered 404.402 (2) and amended
11to read:
SB358,93,1812 404.402 (2) A payor payer bank is liable to its customer for damages
13proximately caused by the wrongful dishonor of an item. When the dishonor occurs
14through mistake liability
Liability is limited to actual damages proved. If so
15proximately caused
and proved damages may include damages for an arrest or
16prosecution of the customer or other consequential damages. Whether any
17consequential damages are proximately caused by the wrongful dishonor is a
18question of fact to be determined in each case.
SB358, s. 79 19Section 79. 404.402 (1) and (3) of the statutes are created to read:
SB358,93,2320 404.402 (1) Except as otherwise provided in this chapter, a payer bank
21wrongfully dishonors an item if it dishonors an item that is properly payable, but a
22bank may dishonor an item that would create an overdraft unless it has agreed to
23pay the overdraft.
SB358,94,6 24(3) A payer bank's determination of the customer's account balance on which
25a decision to dishonor for insufficiency of available funds is based may be made at

1any time between the time the item is received by the payer bank and the time that
2the payer bank returns the item or gives notice in lieu of return, and no more than
3one determination need be made. If, at the election of the payer bank, a subsequent
4balance determination is made for the purpose of reevaluating the bank's decision
5to dishonor the item, the account balance at that time is determinative of whether
6a dishonor for insufficiency of available funds is wrongful.
SB358, s. 80 7Section 80. 404.403 (1) and (3) of the statutes are amended to read:
SB358,94,168 404.403 (1) A customer may by order to the customer's bank stop payment of
9any item payable for the customer's account but the order must be
or any person
10authorized to draw on the account if there is more than one person may stop payment
11of any item drawn on the customer's account or close the account by an order to the
12bank describing the item or account with reasonable certainty
received at such a time
13and in such a manner as to afford that affords the bank a reasonable opportunity to
14act on it prior to before any action by the bank with respect to the item described in
15s. 404.303. If the signature of more than one person is required to draw on an
16account, any of these persons may stop payment or close the account.
SB358,94,21 17(3) The burden of establishing the fact and amount of loss resulting from the
18payment of an item contrary to a binding stop payment stop-payment order or order
19to close an account
is on the customer. The loss from payment of an item contrary
20to a stop-payment order may include damages for dishonor of subsequent items
21under s. 404.402.
SB358, s. 81 22Section 81. 404.403 (2) of the statutes is repealed and recreated to read:
SB358,95,223 404.403 (2) A stop-payment order is effective for 6 months, but it lapses after
2414 calendar days if the original order was oral and was not confirmed in writing
25within that period. A stop-payment order may be renewed for additional 6-month

1periods by a writing given to the bank within a period during which the
2stop-payment order is effective.
SB358, s. 82 3Section 82. 404.405 of the statutes is amended to read:
SB358,95,11 4404.405 Death or incompetence of customer. (1) A payor payer or
5collecting bank's authority to accept, pay or collect an item or to account for proceeds
6of its collection, if otherwise effective, is not rendered ineffective by incompetence of
7a customer of either bank existing at the time the item is issued or its collection is
8undertaken if the bank does not know of an adjudication of incompetence. Neither
9death nor incompetence of a customer revokes such the authority to accept, pay,
10collect or account until the bank knows of the fact of death or of an adjudication of
11incompetence and has reasonable opportunity to act on it.
SB358,95,14 12(2) Even with knowledge, a bank may for 10 days after the date of death pay
13or certify checks drawn on or prior to before that date unless ordered to stop payment
14by a person claiming an interest in the account.
SB358, s. 83 15Section 83. 404.406 (1) of the statutes is repealed and recreated to read:
SB358,95,2116 404.406 (1) A bank that sends or makes available to a customer a statement
17of account showing payment of items for the account shall either return or make
18available to the customer the items paid or provide information in the statement of
19account sufficient to allow the customer reasonably to identify the items paid. The
20statement of account provides sufficient information if the item is described by item
21number, amount and date of payment.
SB358, s. 84 22Section 84. 404.406 (2) and (4) of the statutes are renumbered 404.406 (4) and
23(6) and amended to read:
SB358,96,3
1404.406 (4) If the bank establishes proves that the customer failed, with
2respect to an item, to comply with the duties imposed on the customer by sub. (1) (3),
3the customer is precluded from asserting all of the following against the bank:
SB358,96,54 (a) The customer's unauthorized signature or any alteration on the item, if the
5bank also establishes proves that it suffered a loss by reason of such the failure; and.
SB358,96,136 (b) An The customer's unauthorized signature or alteration by the same
7wrongdoer on any other item paid in good faith by the bank after the first item and
8statement was available to the customer for a reasonable period not exceeding 14
9calendar days and before the bank receives notification from the customer of any
10such unauthorized signature or alteration
if the payment was made before the bank
11received notice from the customer of the unauthorized signature or alteration and
12after the customer had been afforded a reasonable period of time, not exceeding 30
13days, in which to examine the item or statement of account and notify the bank
.
SB358,96,23 14(6) Without regard to care or lack of care of either the customer or the bank,
15a customer who does not within one year from the time after the statement and or
16items are made available to the customer (sub. (1)) discover and report the customer's
17unauthorized signature on or any alteration on the face or back of the item or does
18not within 3 years from that time discover and report any unauthorized indorsement

19on the item is precluded from asserting against the bank such the unauthorized
20signature or indorsement or such alteration. If there is a preclusion under this
21subsection, the payer bank may not recover for breach of warranty under s. 404.208
22with respect to the unauthorized signature or alteration to which the preclusion
23applies.
SB358, s. 85 24Section 85. 404.406 (2) of the statutes is created to read:
SB358,97,6
1404.406 (2) If the items are not returned to the customer, the person retaining
2the items shall either retain the items or, if the items are destroyed, maintain the
3capacity to furnish legible copies of the items until the expiration of 7 years after
4receipt of the items. A customer may request an item from the bank that paid the
5item, and that bank must provide in a reasonable time either the item or, if the item
6has been destroyed or is not otherwise obtainable, a legible copy of the item.
SB358, s. 86 7Section 86. 404.406 (3) and (5) of the statutes are repealed and recreated to
8read:
SB358,97,159 404.406 (3) If a bank sends or makes available a statement of account or items
10under sub. (1), the customer must exercise reasonable promptness in examining the
11statement or the items to determine whether any payment was not authorized
12because of an alteration of an item or because a purported signature by or on behalf
13of the customer was not authorized. If, based on the statement or items provided,
14the customer should reasonably have discovered the unauthorized payment, the
15customer must promptly notify the bank of the relevant facts.
SB358,97,22 16(5) If sub. (4) applies and the customer proves that the bank failed to exercise
17ordinary care in paying the item and that the failure substantially contributed to
18loss, the loss is allocated between the customer precluded and the bank asserting the
19preclusion according to the extent to which the failure of the customer to comply with
20sub. (3) and the failure of the bank to exercise ordinary care contributed to the loss.
21If the customer proves that the bank did not pay the item in good faith, the preclusion
22under sub. (4) does not apply.
SB358, s. 87 23Section 87. 404.407 of the statutes is amended to read:
SB358,98,5 24404.407 (title) Payor Payer bank's right to subrogation on improper
25payment.
If a payor payer bank has paid an item over the stop payment order of

1the drawer or maker to stop payment, or after an account has been closed, or
2otherwise under circumstances giving a basis for objection by the drawer or maker,
3to prevent unjust enrichment and only to the extent necessary to prevent loss to the
4bank by reason of its payment of the item, the payor payer bank shall be is subrogated
5to the rights of all of the following:
SB358,98,7 6(1) Of any Any holder in due course on the item against the drawer or maker;
7and
.
SB358,98,9 8(2) Of the The payee or any other holder of the item against the drawer or
9maker either on the item or under the transaction out of which the item arose; and.
SB358,98,11 10(3) Of the The drawer or maker against the payee or any other holder of the
11item with respect to the transaction out of which the item arose.
SB358, s. 88 12Section 88. The unnumbered subchapter title preceding 404.501 of the
13statutes is numbered subchapter V (title) of chapter 404 and amended to read:
SB358,98,1414 Chapter 404
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