ARTICLE 4A
FUNDS TRANSFERS

Table of Contents

Sec. 42a-4A-105. Other definitions.
Sec. 42a-4A-106. Time payment order is received.
Sec. 42a-4A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order.

PART 1
SUBJECT MATTER AND DEFINITIONS

      Sec. 42a-4A-105. Other definitions. (a) In this article:

      (1) "Authorized account" means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.

      (2) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this article.

      (3) "Customer" means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.

      (4) "Funds-transfer business day" of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.

      (5) "Funds-transfer system" means a wire-transfer network, automated clearing house, or other communication system of a clearing house or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.

      (6) "Prove" with respect to a fact means to meet the burden of establishing the fact.

      (b) Other definitions applying to this article and the section in which they appear are:

      "Acceptance". Section 42a-4A-209.
      "Beneficiary". Section 42a-4A-103.
      "Beneficiary's bank". Section 42a-4A-103.
      "Executed". Section 42a-4A-301.
      "Execution date". Section 42a-4A-301.
      "Funds transfer". Section 42a-4A-104.
      "Funds-transfer system rule". Section 42a-4A-501.
      "Intermediary bank". Section 42a-4A-104.
      "Originator". Section 42a-4A-104.
      "Originator's bank". Section 42a-4A-104.
      "Payment by beneficiary's bank to beneficiary". Section 42a-4A-405.
      "Payment by originator to beneficiary". Section 42a-4A-406.
      "Payment by sender to receiving bank". Section 42a-4A-403.
      "Payment date". Section 42a-4A-401.
      "Payment order". Section 42a-4A-103.
      "Receiving bank". Section 42a-4A-103.
      "Security procedure". Section 42a-4A-201.
      "Sender". Section 42a-4A-103.

      (c) The following definitions in article 4 apply to this article:

      "Item". Section 42a-4-104.
      "Suspends payments". Section 42a-4-104.

      (d) In addition, article 1 contains general interpretation applicable throughout this article.

      (P.A. 90-202, S. 1(4A-105), 3; P.A. 05-109, S. 31.)

      History: P.A. 05-109 amended Subsec. (a) by deleting definition of "good faith" and making technical changes to conform to revisions made to article 1 by the same act.

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      Sec. 42a-4A-106. Time payment order is received. (a) The time of receipt of a payment order or communication cancelling or amending a payment order is determined by the rules applicable to receipt of a notice stated in section 42a-1-202. A receiving bank may fix a cutoff time or times on a funds-transfer business day for the receipt and processing of payment orders and communications cancelling or amending payment orders. Different cutoff times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cutoff time may apply to senders generally or different cutoff times may apply to different senders or categories of payment orders. If a payment order or communication cancelling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cutoff time on a funds-transfer business day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.

      (b) If this article refers to an execution date or payment date or states a day on which a receiving bank is required to take action, and the date or day does not fall on a funds-transfer business day, the next day that is a funds-transfer business day is treated as the date or day stated, unless the contrary is stated in this article.

      (P.A. 90-202, S. 1(4A-106), 3; P.A. 05-109, S. 32.)

      History: P.A. 05-109 amended Subsec. (a) by replacing reference to Sec. 42a-1-201(27) with reference to Sec. 42a-1-202 to conform to revisions made to article 1 by the same act.

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PART 2
ISSUE AND ACCEPTANCE OF PAYMENT ORDER

      Sec. 42a-4A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order. (a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the customer under section 42a-4A-202, or (ii) not enforceable, in whole or in part, against the customer under section 42a-4A-203, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding ninety days after the date the customer received notification from the bank that the order was accepted or that the customer's account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.

      (b) Reasonable time under subsection (a) of this section may be fixed by agreement as stated in subsection (b) of section 42a-1-302, but the obligation of a receiving bank to refund payment as stated in subsection (a) of this section may not otherwise be varied by agreement.

      (P.A. 90-202, S. 1(4A-204), 3; P.A. 03-278, S. 95; P.A. 05-109, S. 33.)

      History: P.A. 03-278 made technical changes in Subsec. (b), effective July 9, 2003; P.A. 05-109 amended Subsec. (b) by replacing reference to Sec. 42a-1-204(1) with reference to Sec. 42a-1-302(b) to conform to revisions made to article 1 by the same act.

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