1995 Wisconsin Act 449

404.215 (title) Final payment of item by payor payer bank; when provisional debits and credits become final; when certain credits become available for withdrawal. (1) (intro.) An item is finally paid by a payor payer bank when the bank has first done any of the following, whichever happens first:

(a) Paid the item in cash; or.

(b) Settled for the item without reserving having a right to revoke the settlement and without having such right under statute, clearinghouse rule or agreement; or.

449,56 Section 56 . 404.213 (1) (c) of the statutes is repealed.

449,57 Section 57 . 404.213 (1a) of the statutes is repealed.

449,58 Section 58 . 404.213 (2) to (4), (4m) and (5) of the statutes are renumbered 404.215 (3) to (5), (5m) and (6), and 404.215 (3), (4), (5), (5m) (a) and (b) 1., 2. and 3. and (6), as renumbered, are amended to read:

404.215 (3) If provisional settlement for an item between the presenting and payor payer banks is made through a clearinghouse or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor payer banks or between the presenting and successive prior collecting banks in a series, they become final upon final payment of the item by the payor payer bank.

404.215 (4) If a collecting bank receives a settlement for an item which is or becomes final (ss. 404.211 (3) and 404.213 (2)), the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.

(5) Subject to applicable law stating a time for availability of funds and to any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in an a customer's account with its customer becomes available for withdrawal as of right:

(a) In any case where If the bank has received a provisional settlement for the item,—when such when the settlement becomes final and the bank has had a reasonable time to learn that the settlement is final; receive return of the item and the item has not been received within that time.

(b) In any case where If the bank is both a the depositary bank and a payor the payer bank and the item is finally paid,—at at the opening of the bank's second 2nd banking day following receipt of the item.

(5m) (a) As used in In this subsection, “banking day" means a business day as defined in s. 421.301 (6) that is not a federal legal holiday.

(b) 1. If the item is a check or draft endorsed only by the person to whom it was issued and is drawn on the treasury of the United States, the this state of Wisconsin or any unit of local government located in this state, after not more than one banking day has intervened between the banking day on which the check or draft is received at the proof and transit facility of the depository and the banking day on which the funds are available for withdrawal.

2. If the payor payer bank or other financial institution is located in this state, after not more than 4 banking days have intervened between the banking day on which the item is received at the proof and transit facility of the depository and the banking day on which the funds are available for withdrawal.

3. If the payor payer bank or other financial institution is located in any other state, after not more than 7 banking days have intervened between the banking day on which the item is received at the proof and transit facility of the depository and the banking day on which the funds are available for withdrawal.

(6) A deposit of money in a bank is final when made but, subject to Subject to applicable law stating a time for availability of funds and any right of the a bank to apply the a deposit to an obligation of the customer, the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank's next banking day following after receipt of the deposit.

449,59 Section 59 . 404.213 of the statutes is created to read:

404.213 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, clearinghouse rules and the like, or agreement. In the absence of such prescription, all of the following apply:

(a) The medium of settlement is cash or credit to an account in a federal reserve bank of or specified by the person to receive settlement.

(b) The time of settlement is:

1. With respect to tender of settlement by cash, a cashier's check, or teller's check, when the cash or check is sent or delivered.

2. With respect to tender of settlement by credit in an account in a federal reserve bank, when the credit is made.

3. With respect to tender of settlement by a credit or debit to an account in a bank, when the credit or debit is made or, in the case of tender of settlement by authority to charge an account, when the authority is sent or delivered.

4. With respect to tender of settlement by a funds transfer, when payment is made pursuant to s. 410.406 (1) to the person receiving settlement.

(2) If the tender of settlement is not by a medium authorized by sub. (1) or the time of settlement is not fixed by sub. (1), no settlement occurs until the tender of settlement is accepted by the person receiving settlement.

(3) If settlement for an item is made by cashier's check or teller's check and the person receiving settlement, before its midnight deadline does any of the following:

(a) Presents or forwards the check for collection, settlement is final when the check is finally paid.

(b) Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.

(4) If settlement for an item is made by giving authority to charge the account of the bank giving settlement in the bank receiving settlement, settlement is final when the charge is made by the bank receiving settlement if there are funds available in the account for the amount of the item.

449,60 Section 60 . 404.214 of the statutes is renumbered 404.216 and amended to read:

404.216 Insolvency and preference. (1) Any If an item is in or coming comes into the possession of a payor payer or collecting bank which that suspends payment and which the item is has not been finally paid shall, 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.

(2) If a payor payer bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor payer bank.

(3) If a payor payer bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement settlement's becoming final if such the finality occurs automatically upon the lapse of certain time or the happening of certain events (ss. 404.211 (3) and 404.213 (1) (d), (2) and (3)).

(4) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against such the collecting bank.

449,61 Section 61 . 404.214 (2) of the statutes is created to read:

404.214 (2) A collecting bank returns an item when it is sent or delivered to the bank's customer or transferor or pursuant to its instructions.

449,62 Section 62 . 404.215 (2) of the statutes is created to read:

404.215 (2) If provisional settlement for an item does not become final, the item is not finally paid.

449,63 Section 63 . The unnumbered subchapter title preceding 404.301 of the statutes is numbered subchapter III (title) of chapter 404 and amended to read:

Subchapter III
Collection of items: payor
payer banks

449,64 Section 64 . 404.301 of the statutes is amended to read:

404.301 (title) Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payer bank. (1) Where an authorized settlement If a payor bank settles for a demand item (other than a documentary draft) received by a payor bank presented otherwise than for immediate payment over the counter has been made before midnight of the banking day of receipt, the payor payer bank may revoke the settlement and recover any payment the settlement if, before it has made final payment (s. 404.213 (1)) and before its midnight deadline, it does any of the following:

(a) Returns the item; or.

(b) Sends written notice of dishonor or nonpayment if the item is held for protest or is otherwise unavailable for return.

(2) If a demand item is received by a payor payer bank for credit on its books, it may return such the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in sub. (1).

(3) Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.

(4) An item is returned:

(a) As to an item received presented through a clearinghouse, when it is delivered to the presenting or last collecting bank or to the clearinghouse or is sent or delivered in accordance with its clearinghouse rules; or.

(b) In all other cases, when it is sent or delivered to the bank's customer or transferor or pursuant to the customer's or transferor's instructions.

449,65 Section 65 . 404.302 (title) of the statutes is amended to read:

404.302 (title) Payor Payer bank's responsibility for late return of item.

449,66 Section 66 . 404.302 of the statutes is renumbered 404.302 (1) and amended to read:

404.302 (1) In the absence of a valid defense such as breach of a presentment warranty under s. 404.207 (1), settlement effected or the like, if If an item is presented on to and received by a payor payer bank, the bank is accountable for the amount of any of the following:

(a) A demand item, other than a documentary draft , whether properly payable or not, if the bank, in any case where in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, regardless of whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline; or.

(b) Any other properly payable item, unless within the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.

449,67 Section 67 . 404.302 (2) of the statutes is created to read:

404.302 (2) The liability of a payer bank to pay an item under sub. (1) is subject to defenses based on breach of a presentment warranty or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payer bank.

449,68 Section 68 . 404.303 (title) and (1) (intro.) and (a) to (c) of the statutes are amended to read:

404.303 (title) When items subject to notice, stop-order stop-payment order, legal process or setoff; order in which items may be charged or certified. (1) (intro.) Any knowledge, notice or stop-order stop-payment order received by, legal process served upon or setoff exercised by a payor payer bank, whether or not effective under other rules of law 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, comes too late to so terminate, suspend or modify such right or duty if the knowledge, notice, stop-order 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 bank has done any earliest of the following:

(a) Accepted or certified The bank accepts or certifies the item;.

(b) Paid The bank pays the item in cash;.

(c) Settled The bank settles for the item without reserving having a right to revoke the settlement and without having such right under statute, clearinghouse rule or agreement;.

449,69 Section 69 . 404.303 (1) (d) of the statutes is repealed.

449,70 Section 70 . 404.303 (1) (e) of the statutes is renumbered 404.303 (1) (d) and amended to read:

404.303 (1) (d) Become The bank becomes accountable for the amount of the item under ss. 404.213 (1) (d) and s. 404.302 dealing with the payor payer bank's responsibility for late return of items.

449,71 Section 71 . 404.303 (1) (e) of the statutes is created to read:

404.303 (1) (e) With respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.

449,72 Section 72 . 404.303 (2) of the statutes is amended to read:

404.303 (2) Subject to sub. (1), items may be accepted, paid, certified or charged to the indicated account of its customer in any order convenient to the bank.

449,73 Section 73 . The unnumbered subchapter title preceding 404.401 of the statutes is numbered subchapter IV (title) of chapter 404 and amended to read:

Subchapter IV
Relationship between payor payer
bank and its customer

449,74 Section 74 . 404.401 (1) of the statutes is amended to read:

404.401 (1) As against its customer, a A bank may charge against the customer's account any of a customer an item which that is otherwise 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.

449,75 Section 75 . 404.401 (2) of the statutes is renumbered 404.401 (4) and amended to read:

404.401 (4) A bank which that in good faith makes payment to a holder may charge the indicated account of its customer according to any of the following:

(a) The original tenor terms of the customer's altered item; or.

(b) The tenor terms of the customer's completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.

449,76 Section 76 . 404.401 (2) and (3) of the statutes are created to read:

404.401 (2) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item.

(3) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in s. 404.403 (2) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in s. 404.303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under s. 404.402.

449,77 Section 77 . 404.402 (title) of the statutes is amended to read:

404.402 (title) Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.

449,78 Section 78 . 404.402 of the statutes is renumbered 404.402 (2) and amended to read:

404.402 (2) A payor payer bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. When the dishonor occurs through mistake liability Liability is limited to actual damages proved. If so proximately caused and proved damages may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.

449,79 Section 79 . 404.402 (1) and (3) of the statutes are created to read:

404.402 (1) Except as otherwise provided in this chapter, a payer bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.

(3) A payer bank's determination of the customer's account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payer bank and the time that the payer bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payer bank, a subsequent balance determination is made for the purpose of reevaluating the bank's decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.

449,80 Section 80 . 404.403 (1) and (3) of the statutes are amended to read:

404.403 (1) A customer may by order to the customer's bank stop payment of any item payable for the customer's account but the order must be 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 such a time and in such a manner as to afford that affords the bank a reasonable opportunity to act on it prior to before any action by the bank with respect to the item described in s. 404.303. 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.