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.
(3) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a binding stop payment stop-payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop-payment order may include damages for dishonor of subsequent items under s. 404.402.
449,81
Section 81
. 404.403 (2) of the statutes is repealed and recreated to read:
404.403 (2) A stop-payment order is effective for 6 months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional 6-month periods by a writing given to the bank within a period during which the stop-payment order is effective.
449,82
Section 82
. 404.405 of the statutes is amended to read:
404.405 Death or incompetence of customer. (1) A payor payer 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 such 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.
(2) Even with knowledge, a bank may for 10 days after the date of death pay or certify checks drawn on or prior to before that date unless ordered to stop payment by a person claiming an interest in the account.
449,83
Section 83
. 404.406 (1) of the statutes is repealed and recreated to read:
404.406 (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.
449,84
Section 84
. 404.406 (2) and (4) of the statutes are renumbered 404.406 (4) and (6) and amended to read:
404.406 (4) If the bank establishes proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by sub. (1)
(3), the customer is precluded from asserting all of the following against the bank:
(a) The customer's unauthorized signature or any alteration on the item, if the bank also establishes proves that it suffered a loss by reason of such the failure; and.
(b) An The customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank after the first item and statement was available to the customer for a reasonable period not exceeding 14 calendar days and before the bank receives notification from the customer of any such unauthorized signature or alteration if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding 30 days, in which to examine the item or statement of account and notify the bank.
(6) Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year from the time after the statement and or items are made available to the customer (sub. (1)) discover and report the customer's unauthorized signature on or any alteration on the face or back of the item or does not within 3 years from that time discover and report any unauthorized indorsement on the item is precluded from asserting against the bank such the unauthorized signature or indorsement or such alteration. If there is a preclusion under this subsection, the payer bank may not recover for breach of warranty under s. 404.208 with respect to the unauthorized signature or alteration to which the preclusion applies.
449,85
Section 85
. 404.406 (2) of the statutes is created to read:
404.406 (2) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of 7 years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.
449,86
Section 86
. 404.406 (3) and (5) of the statutes are repealed and recreated to read:
404.406 (3) If a bank sends or makes available a statement of account or items under sub. (1), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.
(5) If sub. (4) applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with sub. (3) and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under sub. (4) does not apply.
449,87
Section 87
. 404.407 of the statutes is amended to read:
404.407 (title) Payor
Payer bank's right to subrogation on improper payment. If a payor payer bank has paid an item over the stop payment 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 payer bank shall be is subrogated to the rights of all of the following:
(1) Of any Any holder in due course on the item against the drawer or maker; and.
(2) Of the The payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose; and.
