Exam 25: Banking System and Electronic Financial Transactions

If a customer notifies the issuing bank within two days of learning that his or her debit card has been lost or stolen, the customer is liable for only $100 for unauthorized use.

Under UCC guidelines, to require a bank to abide by a postdated check, the drawer must give separate written notice to the bank, describing the check with reasonable certainty and notifying the bank not to pay the check until the date on the check.

John writes a check for $100 on his account at the Sacred Heart Bank to repay the $100 he owes Perry. He gives the check to Eliot and tells her to hand it over to Perry. However, Eliot loses the check before she can give it to Perry. Later, John realizes that he had not written Perry's name on the lost check. According to the provisions of the Uniform Commercial Code (UCC), on which of the following parties should the risk of loss of the check be placed?

If there are major failures of several large banks or many small banks, and the Federal Deposit Insurance Corporation (FDIC) 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.

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

If a bank does not honor a check when there are sufficient funds in the drawer's account to pay a properly payable check, it is liable for wrongful dishonor.

The federal Currency Reporting Law requires financial institutions and other entities to file a Currency Transaction Report (CTR) with the Internal Revenue Service (IRS) in the event of the detection of suspected criminal activity by bank customers involving a financial transaction of $1,000 or more in funds.

Which of the following statements is true of certified checks?

In which of the following cases is a bank obliged to file a Currency Transaction Report (CTR) with the Internal Revenue Service?

The ________ is a government agency that insures deposits at most banks and savings institutions in the United States.

When the drawee bank receives a properly drawn and payable check, the bank is under a duty to honor the check and charge (debit) the drawer's account the amount of the check if there are sufficient funds in the customer's checking account at the bank.

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

Which of the following is one of the purposes of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

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

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

If a checking account customer fails to report a series of forgeries or alterations by the same wrongdoer on the same account within 30 days from receiving the monthly statement of account, then the bank is discharged from liability on all similar forged or altered checks after that date and prior to notification.

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 ________.

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.

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

Article 3 of the Uniform Commercial Code establishes the ________.