Exam 25: Banking System and Electronic Financial Transactions

Except for the collecting bank,each bank in the collection process,including the payer bank,must take proper action on an "on them" check prior to its midnight deadline.

It is not necessary to have a checking account at the issuing bank to purchase a cashier's check.

If a payer bank pays the altered amount on an altered check,it can recover the altered amount minus the original tenor from the party who presented the altered check for payment.

The term ________ refers to the computer and electronic technology that makes it possible for banks to offer electronic payment and collection systems to bank customers.

What changes did the Dodd-Frank Wall Street Reform and Consumer Protection Act make to reform lending regulation?

The drawer's failure to report a forged or altered check to the bank within six months of receiving the bank statement and canceled checks containing it relieves the bank of any liability for paying the instrument.

According to the Electronic Funds Transfer Act and Regulation E adopted by the Federal Reserve Board,a bank can send unsolicited electronic funds transfer system (EFT S)debit cards to a consumer only if the cards are not valid for use.

Article 4A of the Uniform Commercial Code establishes the ________.

Edda receives a check for $100 from Sheldon.Sheldon has a balance of $3,600 in his checking account with Rosemund Bank.In this case,Edda is the ________.

Which of the following is an accurate description of wrongful dishonor of a check?

The payer bank cannot charge the customer's account if it pays a check over the forged signature.

A stop-payment order can be issued either by the drawer or the payee.

If there are major failures of several large banks or many small banks,and the Federal Deposit Insurance Corporation (FDI C)insurance fund is insufficient to cover all of the depositors' losses, then the U.S. government will pay the depositors the money owed by the FDIC.

Certified checks become stale after two years from the date of their issue.

An oral order to stop payment on a check is binding on the payer bank for a period of 14 calendar days.

Francis Jeffers purchased a cashier's check in the amount of $5,000 from Northern Star Bank.The check was made payable to Kyle Naughton and was delivered to him.Twelve months later,the Northern Star Bank branch manager informed Jeffers that the cashier's check was still outstanding.Jeffers subsequently signed a form requesting that payment be stopped and a replacement check be issued.Northern Star Bank issued a replacement check to Jeffers.Eight months later,Naughton deposited the original cashier's check in his bank,which was paid by Northern Star Bank.Northern Star Bank requested that Jeffers repay the bank $5,000.When he refused,Northern Star Bank sued Jeffers to recover this amount and the court awarded Northern Star Bank damages amounting to $5,500.In which of the following circumstances,if true,would the court have ruled in Jeffers' favor?

If the drawer does not have enough money in his or her account when a properly payable check is presented for payment,the payer bank is obligated to honor the check and create an overdraft in the drawer's account.

In banking terminology,a creditor-debtor relationship is created when a customer ________.

A forged signature is wholly inoperative as the signature of a drawer.

The Dodd-Frank Wall Street Reform and Consumer Protection Act grants powers to the Federal Reserve to monitor and regulate institutions it supervises,including bank holding companies,savings bank holding companies,and affiliates of holding companies.