Exam 29: Bank Deposits, Collections, and Funds Transfers

A system for electronic funds transfers (EFT) in which machines are located in a merchant's store and are activated by the consumer's identification card and code is known as:

If Margie makes out a check for $27.50 when she has only $10 in her account, her bank may:

First Bank pays a forged check on Donald's account.Donald finds it when, the day he receives it, he is examining his bank statement for the month.He brings it to the bank the next day to call it to their attention, but they refuse to credit his account.The bank has an obligation to recredit Donald's account.

A payment order:

Banking and the collection process of checks is governed solely by state law, primarily the UCC.

MICR enables check processing without further human involvement.

If a bank receives a check on Tuesday, it must take proper action by midnight of Wednesday.

Mark takes his wife's paycheck to Valley Bank to deposit in their joint account.Valley Bank may deposit the check without his wife's indorsement unless the indorsement is expressly required.

Caryn deposits a check in her bank at 2:30 on Monday.The bank may, under the Code, treat the check as having been deposited on Tuesday for purposes of meeting the midnight deadline rule.

The Wall Street Reform and Consumer Protection Act of 2010 requires that the amount of any interchange transaction fee that an issuer may receive or charge with respect to an electronic debit transaction, including those on debit cards issued by small banks and prepaid reloadable cards, must be reasonable and proportional to the cost incurred by the issuer, as determined by the Federal Reserve.

Consumer electronic funds transfers are covered by Article 4A of the UCC, and nonconsumer electronic transfers are covered by the federal Electronic Fund Transfer Act.

Which of the following is true with regard to the federal Electronic Fund Transfer Act?

Describe and summarize what happens during the collection process once a check is deposited in a customer's account.How does it get back to the drawee?

Tania calls her bank to issue an oral stop payment order on a check on March 1.She then leaves town for two weeks to visit her mother.When she returns, she goes to the bank to sign a written stop payment order, but finds the bank has already paid the check.What recourse does she have? Explain, citing provisions in Article 4.

If a bank pays on a check after the death of its customer, the customer's estate is not automatically entitled to reimbursement.

David dies an untimely death in a boating accident two days after writing a check to his landlord.When the check is presented to his bank three weeks later, they refuse to pay.The landlord will have to file a claim in any probate proceedings if he wishes to collect on the check.

Which of the following is/are excluded from UCC Article 4A coverage?

The relationship between the payor bank and its checking account customer is exclusively governed by statute and leaves no room for contractual modifications.

For how long is an oral stop payment order valid?

Which warranties does a collecting bank give?