SB358,65,1312 (c) Failure to perform a duty to preserve the value of collateral owed, under ch.
13409 or other law, to a debtor or surety or other person secondarily liable.
SB358,65,1414 (d) Failure to comply with applicable law in disposing of collateral.
SB358,65,17 15(8) An accommodation party is not discharged under sub. (3), (4) or (5) unless
16the person entitled to enforce the instrument knows of the accommodation or has
17notice under s. 403.419 (3) that the instrument was signed for accommodation.
SB358,65,22 18(9) A party is not discharged under this section if the party asserting discharge
19consents to the event or conduct that is the basis of the discharge or if the instrument
20or a separate agreement of the party provides for waiver of discharge under this
21section either specifically or by general language indicating that parties waive
22defenses based on suretyship or impairment of collateral.
SB358, s. 10 23Section 10. The unnumbered subchapter title preceding 404.101 of the
24statutes is renumbered subchapter I (title) of chapter 404.
SB358, s. 11 25Section 11. 404.101 of the statutes is repealed.
SB358, s. 12
1Section 12. 404.102 of the statutes is amended to read:
SB358,66,6 2404.102 Applicability. (1) To the extent that items within this chapter are
3also within the scope of chs. 403 and 408, they are subject to the provisions of those
4chapters. In the event of If there is conflict the provisions of, this chapter govern
5those of
governs ch. 403, but the provisions of ch. 408 govern those of governs this
6chapter.
SB358,66,11 7(2) The liability of a bank for action or nonaction with respect to any an item
8handled by it for purposes of presentment, payment or collection is governed by the
9law of the place where the bank is located. In the case of action or nonaction by or
10at a branch or separate office of a bank, its liability is governed by the law of the place
11where the branch or separate office is located.
SB358, s. 13 12Section 13. 404.103 of the statutes is amended to read:
SB358,66,20 13404.103 (title) Variation by agreement; measure of damages; certain
14action constituting ordinary care.
(1) The effect of the provisions of this chapter
15may be varied by agreement except that no agreement can , but the parties to the
16agreement cannot
disclaim a bank's responsibility for its own lack of good faith or
17failure to exercise ordinary care or can limit the measure of damages for such the lack
18or failure; but. However, the parties may determine by agreement determine the
19standards by which such the bank's responsibility is to be measured if such those
20standards are not manifestly unreasonable.
SB358,66,23 21(2) Federal reserve regulations and operating letters circulars, clearinghouse
22rules, and the like, have the effect of agreements under sub. (1), whether or not
23specifically assented to by all parties interested in items handled.
SB358,67,3 24(3) Action or nonaction approved by this chapter or pursuant to federal reserve
25regulations or operating letters constitutes circulars is the exercise of ordinary care

1and, in the absence of special instructions, action or nonaction consistent with
2clearinghouse rules and the like or with a general banking usage not disapproved by
3this chapter, is prima facie constitutes the exercise of ordinary care.
SB358,67,6 4(4) The specification or approval of certain procedures by this chapter does not
5constitute
is not disapproval of other procedures which that may be reasonable under
6the circumstances.
SB358,67,11 7(5) The measure of damages for failure to exercise ordinary care in handling
8an item is the amount of the item reduced by an amount which that could not have
9been realized by the use exercise of ordinary care, and where. If there is also bad faith
10it includes any other damages, if any, suffered by the party suffered as a proximate
11consequence.
SB358, s. 14 12Section 14. 404.104 (1) (intro.) and (a) to (f) of the statutes are amended to
13read:
SB358,67,1414 404.104 (1) (intro.) In this chapter, unless the context otherwise requires:
SB358,67,1815 (a) "Account" means any deposit or credit account with a bank and includes a
16checking, time, interest or savings account;
, including a demand, time, savings,
17passbook, share draft or like account, other than an account evidenced by a
18certificate of deposit.
SB358,67,1919 (b) "Afternoon" means the period of a day between noon and midnight ;.
SB358,67,2120 (c) "Banking day" means that the part of any a day on which a bank is open to
21the public for carrying on substantially all of its banking functions ;.
SB358,67,2322 (d) "Clearinghouse" means any an association of banks or other payors payers
23regularly clearing items;.
SB358,68,3
1(e) "Customer" means any a person having an account with a bank or for whom
2a bank has agreed to collect items and includes, including a bank carrying that
3maintains
an account with at another bank;.
SB358,68,94 (f) "Documentary draft" means any negotiable or nonnegotiable draft with
5accompanying documents, securities or other papers to be delivered against honor
6of the draft;
a draft to be presented for acceptance or payment if specified documents,
7certificated securities or instructions for uncertificated securities, or other
8certificates, statements or the like are to be received by the drawee or other payer
9before acceptance or payment of the draft.
SB358, s. 15 10Section 15. 404.104 (1) (g), (h) and (j) of the statutes are renumbered 404.104
11(1) (i), (j) and (k) and amended to read:
SB358,68,1512 404.104 (1) (i) "Item" means any an instrument for the payment of money even
13though it is not negotiable but does not include money;
or a promise or order to pay
14money handled by a bank for collection or payment. "Item" does not include a
15payment order governed by ch. 410 or a credit or debit card slip.
SB358,68,1816 (j) "Midnight deadline" with respect to a bank is midnight on its next banking
17day following the banking day on which it receives the relevant item or notice or from
18which the time for taking action commences to run, whichever is later ;.
SB358,68,2119 (k) "Settle" means to pay in cash, by clearinghouse settlement, in a charge or
20credit or by remittance, or otherwise as instructed agreed. A settlement may be
21either provisional or final;.
SB358, s. 16 22Section 16. 404.104 (1) (g) and (h) of the statutes are created to read:
SB358,68,2423 404.104 (1) (g) "Draft" means a draft as defined in s. 403.104 (5), or an item,
24other than an instrument, that is an order.
SB358,68,2525 (h) "Drawee" means a person ordered in a draft to make a payment.
SB358, s. 17
1Section 17. 404.104 (1) (i) of the statutes is repealed.
SB358, s. 18 2Section 18. 404.104 (1) (k) of the statutes is renumbered 404.104 (1) (L).
SB358, s. 19 3Section 19. 404.104 (2) (a) to (e) of the statutes are renumbered 404.104 (2)
4(c) to (g), and 404.104 (2) (f), as renumbered, is amended to read:
SB358,69,55 404.104 (2) (f) "Payor "Payer bank" — s. 404.105.
SB358, s. 20 6Section 20. 404.104 (2) (a), (b) and (h) of the statutes are created to read:
SB358,69,77 404.104 (2) (a) "Agreement for electronic presentment" — s. 404.110 (1).
SB358,69,88 (b) "Bank" — s. 404.105 (1).
SB358,69,99 (h) "Presentment notice" — s. 404.110 (1).
SB358, s. 21 10Section 21. 404.104 (2) (f) of the statutes is repealed.
SB358, s. 22 11Section 22. 404.104 (3) (a) of the statutes is amended to read:
SB358,69,1212 404.104 (3) (a) "Acceptance" — s. 403.410 403.409 (1).
SB358, s. 23 13Section 23. 404.104 (3) (b), (d), (f), (g) and (h) of the statutes are renumbered
14404.104 (3) (d), (f), (h), (j) and (n), and 404.104 (3) (j) and (n), as renumbered, are
15amended to read:
SB358,69,1616 404.104 (3) (j) "Notice of dishonor" — s. 403.508 403.503.
SB358,69,1717 (n) "Presentment" — s. 403.504 403.501 (1).
SB358, s. 24 18Section 24. 404.104 (3) (b), (c), (e), (g), (i), (k) to (m) and (p) to (s) of the statutes
19are created to read:
SB358,69,2020 404.104 (3) (b) "Alteration" — s. 403.407 (1).
SB358,69,2121 (c) "Cashier's check" — s. 403.104 (7).
SB358,69,2222 (e) "Certified check" — s. 403.409 (4).
SB358,69,2323 (g) "Good faith" — s. 403.103 (1) (d).
SB358,69,2424 (i) "Instrument" — s. 403.104 (2).
SB358,69,2525 (k) "Order" — s. 403.103 (1) (f).
SB358,70,1
1(L) "Ordinary care" — s. 403.103 (1) (g).
SB358,70,22 (m) "Person entitled to enforce" — s. 403.301.
SB358,70,33 (p) "Promise" — s. 403.103 (1) (i).
SB358,70,44 (q) "Prove" — s. 403.103 (1) (j).
SB358,70,55 (r) "Teller's check" — s. 403.104 (8).
SB358,70,66 (s) "Unauthorized signature" — s. 403.403.
SB358, s. 25 7Section 25. 404.104 (3) (c), (e), (i) and (j) of the statutes are repealed.
SB358, s. 26 8Section 26. 404.104 (4) of the statutes is amended to read:
SB358,70,109 404.104 (4) In addition, ch. 401 contains general definitions and principles of
10construction and interpretation applicable throughout this chapter.
SB358, s. 27 11Section 27. 404.105 (intro.) of the statutes is amended to read:
SB358,70,15 12404.105 (title) "Depositary bank"; "intermediary bank" "Bank";
13"collecting bank";
"payor "depository bank"; "intermediary bank"; "payer
14bank"; "presenting bank"
; "remitting bank". (intro.) In this chapter unless the
15context otherwise requires
:
SB358, s. 28 16Section 28. 404.105 (1) to (5) of the statutes are renumbered 404.105 (2) to (6)
17and amended to read:
SB358,70,1918 404.105 (2) "Collecting bank" means any a bank handling the an item for
19collection except the payor payer bank;.
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.
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