SB358: Bill Text

SB358,82,8 404.212 (title) Presentment by notice of item not payable by, through or at a bank; liability of secondary parties drawer or endorser. (1) Unless otherwise instructed, a collecting bank may present an item not payable by, through or at a bank by sending to the party to accept or pay a written notice that the bank holds the item for acceptance or payment. The notice must be sent in time to be received on or before the day when presentment is due and the bank must meet any requirement of the party to accept or pay under s. 403.505 403.501 by the close of the bank's next banking day after it knows of the requirement.

SB358,82,15 (2) Where If presentment is made by notice and neither honor nor payment, acceptance or request for compliance with a requirement under s. 403.505 403.501 is not received by the close of business on the day after maturity or, in the case of demand items, by the close of business on the third 3rd banking day after notice was sent, the presenting bank may treat the item as dishonored and charge any secondary party drawer or endorser by sending the secondary party it notice of the facts.

SB358, s. 52 Section 52. 404.211 of the statutes is repealed.

SB358, s. 53 Section 53. 404.212 (title), (1) and (2) to (5) of the statutes are renumbered 404.214 (title), (1) and (3) to (6), and 404.214 (title), (1), (3), (4) and (6), as renumbered, are amended to read:

SB358,83,8 404.214 (title) Right of charge-back or refund; liability of collecting bank; return of item. (1) If a collecting bank has made provisional settlement with its customer for an item and itself fails by reason of dishonor, suspension of payments by a bank or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge-back charge back the amount of any credit given for the item to its customer's account, or obtain refund from its customer, whether or not it is able to return the items item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit or obtain a refund from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge-back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final (ss. 404.211 (3) and 404.213 (2) and (3)).

SB358,83,12 (3) A depositary bank which that is also the payor payer may charge-back charge back the amount of an item to its customer's account or obtain refund in accordance with s. 404.301 governing return of an item received by a payor payer bank for credit on its books.

SB358,83,13 (4) The right to charge-back is not affected by any of the following:

SB358,83,14 (a) Prior Previous use of the a credit given for the item; or .

SB358,83,16 (b) Failure by any bank to exercise ordinary care with respect to the item, but any a bank so failing remains liable.

SB358,83,21 (6) If credit is given in dollars as the equivalent of the value of an item payable in a foreign currency money, the dollar amount of any charge-back or refund shall must be calculated on the basis of the buying sight bank-offered spot rate for the foreign currency money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.

SB358, s. 54 Section 54. 404.212 (1m) of the statutes is repealed.

SB358, s. 55 Section 55. 404.213 (title) and (1) (intro.), (a), (b) and (d) of the statutes are renumbered 404.215 (title) and (1) (intro.), (a), (b) and (c), and 404.215 (title) and (1) (intro.) and (a) and (b), as renumbered, are amended to read:

SB358,84,4 404.215 (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:

SB358,84,5 (a) Paid the item in cash; or.

SB358,84,8 (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.

SB358, s. 56 Section 56. 404.213 (1) (c) of the statutes is repealed.

SB358, s. 57 Section 57. 404.213 (1a) of the statutes is repealed.

SB358, s. 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:

SB358,84,19 404.215 (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.

SB358,84,23 404.215 (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.

SB358,85,2 (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:

SB358,85,6 (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.

SB358,85,9 (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.

SB358,85,11 (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.

SB358,85,17 (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.

SB358,85,21 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.

SB358,85,25 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.

SB358,86,5 (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.

SB358, s. 59 Section 59. 404.213 of the statutes is created to read:

SB358,86,10 404.213 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:

SB358,86,12 (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.

SB358,86,13 (b) The time of settlement is:

SB358,86,15 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.

SB358,86,17 2. With respect to tender of settlement by credit in an account in a federal reserve bank, when the credit is made.

SB358,86,20 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.

SB358,86,22 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.

SB358,86,25 (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.

SB358,87,2 (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:

SB358,87,4 (a) Presents or forwards the check for collection, settlement is final when the check is finally paid.

SB358,87,6 (b) Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.

SB358,87,10 (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.

SB358, s. 60 Section 60. 404.214 of the statutes is renumbered 404.216 and amended to read:

SB358,87,17 404.216 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.

SB358,87,21 (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.

SB358,88,2 (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)).

SB358,88,6 (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.

SB358, s. 61 Section 61. 404.214 (2) of the statutes is created to read:

SB358,88,9 404.214 (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.

SB358, s. 62 Section 62. 404.215 (2) of the statutes is created to read:

SB358,88,12 404.215 (2) If provisional settlement for an item does not become final, the item is not finally paid.

SB358, s. 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:

SB358,88,17 Subchapter III Collection of items: payor payer banks

SB358, s. 64 Section 64. 404.301 of the statutes is amended to read:

SB358,89,2 404.301 (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:

SB358,89,3 (a) Returns the item; or.

SB358,89,5 (b) Sends written notice of dishonor or nonpayment if the item is held for protest or is otherwise unavailable for return.

SB358,89,9 (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).

SB358,89,12 (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.

SB358,89,13 (4) An item is returned:

SB358,89,16 (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.

SB358,89,18 (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.

SB358, s. 65 Section 65. 404.302 (title) of the statutes is amended to read:

SB358,89,20 404.302 (title) Payor Payer bank's responsibility for late return of item.

SB358, s. 66 Section 66. 404.302 of the statutes is renumbered 404.302 (1) and amended to read:

SB358,90,2 404.302 (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:

SB358,90,7 (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.

SB358,90,10 (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.

SB358, s. 67 Section 67. 404.302 (2) of the statutes is created to read:

SB358,90,15 404.302 (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.

SB358, s. 68 Section 68. 404.303 (title) and (1) (intro.) and (a) to (c) of the statutes are amended to read:

SB358,91,2 404.303 (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:

SB358,91,3 (a) Accepted or certified The bank accepts or certifies the item;.

SB358,91,4 (b) Paid The bank pays the item in cash;.

SB358,91,7 (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;.

SB358, s. 69 Section 69. 404.303 (1) (d) of the statutes is repealed.

SB358, s. 70 Section 70. 404.303 (1) (e) of the statutes is renumbered 404.303 (1) (d) and amended to read:

SB358,91,13 404.303 (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.

SB358, s. 71 Section 71. 404.303 (1) (e) of the statutes is created to read:

SB358,91,19 404.303 (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.

SB358, s. 72 Section 72. 404.303 (2) of the statutes is amended to read:

SB358,91,22 404.303 (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.

SB358, s. 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:

SB358,92,3 Subchapter IV Relationship between payor payer bank and its customer

SB358, s. 74 Section 74. 404.401 (1) of the statutes is amended to read:

SB358,92,9 404.401 (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.

SB358, s. 75 Section 75. 404.401 (2) of the statutes is renumbered 404.401 (4) and amended to read:

SB358,92,13 404.401 (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:

SB358,92,14 (a) The original tenor terms of the customer's altered item; or.

SB358,92,17 (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.