Exam 2 Flashcards
Stale Checks Time
6 months after date (banks can still paper after IF they choose to)
Certified Checks are good for how long?
No date
How long does bank have to respond to learning of death/incompetence?
1 business day
How long after a death does the bank have the right to pay bills drawn on customer’s account without liability?
10 days
Oral stop payment is good for how long?
14 days
written stop payment is good for how long?
6 months
Does stopping a payment get rid of your liability?
NO, a holder may still sue you for the amount. The bank just won’t allow it to be processed.
Generally who is responsible when a forged check is accepted?
The BANK, UNLESS you were negligent
The rule for forgeries
Bank is liable. Example: someone writes 5 fake checks in January 5th, 6th, 7th, 8th, 9th, and 10th. You don’t receive your statement until the end of the month. They are responsible!
UNLESS customer was negligent. Bank will only help you within the month. If it’s a serial forgery and you never report any of it, they will only pay you back for the first month.
How long is the statute of limitations of telling your bank of forgeries?
1 year
On-Us Checks
Checks drawn and paid to account holders at the same bank.
When are on-us checks due?
The morning of the 2nd business day. Otherwise deemed to be honored
Expedited Funds Availability Act
Max amount of time the bank can separate us from our money
Next Day Deposit Items
Cash Electronic Payment/deposits/wired money Direct deposits cashier/certified checks on-us items
Checks from out of town timing?
morning of second banking day
-but must give you access to $200 immediately
Proprietary ATM timing
Can ADD 1 more banking day
Non-proprietary ATM timing
can ADD up to 5 banking days
New Account at a bank timing
Up to 9 banking days after deposit
Exceptions to new account rule
certified checks, cashier checks, government checks
Checks Greater than $5,000 timing
Up to 7 banking days after deposit
NSF timing
Up to 7 banking days after deposit
EFTs
Electronic Funds transfer are subject to the Electronic Funds Transfer Act
What is included in EFT act?
Anything that sends money through a wire involving a bank.
- ATM, POS (debit cards/debit systems), direct deposits/withdrawals, pay by internet systems
How long does a customer have to report errors from EFTs?
60 days
What must institution do while investigating EFT error?
They have 10 days to figure out the investigation
-IF they need more time they can have up to 45 more days but are required to give you your money in the meantime
Once an institution has verified a an EFT error how long do they have to fix it?
1 business day
Customer will be liable for an unauthorized transaction if…
the transfer resulted from the use of an accepted means of access to the system
the customer had been provided with a means of security from unauthorized transfer, such as a pin number
Liability for unauthorized
Less than 2 days = $50
2-60 days = $500
Over 60 = unlimited
Two main systems for commercial wiring?
Fedwire (by fed reserve)
CHIPS (privately owned by banks)
BOTH BASED IN NY
Article 4A
Governs payment orders and funds transfers
Payment order
an unconditional INSTRUCTION to pay to a beneficiary
