ORS Chapter 74a
Chapter 74A — FundsTransfers
2009 EDITION
FUNDSTRANSFERS
COMMERCIALTRANSACTIONS
GENERALPROVISIONS
74A.1010 Shorttitle
74A.1020 Subjectmatter
74A.1030 Paymentorder; definitions
74A.1040 Fundstransfer; definitions
74A.1050 Otherdefinitions
74A.1060 Timepayment order is received
74A.1070 FederalReserve regulations and operating circulars
74A.1080 Exclusionof consumer transactions covered by federal law
ISSUEAND ACCEPTANCE OF PAYMENT ORDER
74A.2010 Securityprocedure
74A.2020 Authorizedand verified payment orders
74A.2030 Unenforceabilityof certain verified payment orders
74A.2040 Refundof payment and duty of customer to report with respect to unauthorized paymentorder
74A.2050 Erroneouspayment orders
74A.2060 Transmissionof payment order through funds transfer or other communication system
74A.2070 Misdescriptionof beneficiary
74A.2080 Misdescriptionof intermediary bank or beneficiary’s bank
74A.2090 Acceptanceof payment order
74A.2100 Rejectionof payment order
74A.2110 Cancellationand amendment of payment order
74A.2120 Liabilityand duty of receiving bank regarding unaccepted payment order
EXECUTIONOF SENDER’S PAYMENT ORDER BY RECEIVING BANK
74A.3010 Executionand execution date
74A.3020 Obligationsof receiving bank in execution of payment order
74A.3030 Erroneousexecution of payment order
74A.3040 Dutyof sender to report erroneously executed payment order
74A.3050 Liabilityfor late or improper execution or failure to execute payment order
PAYMENT
74A.4010 Paymentdate
74A.4020 Obligationof sender to pay receiving bank
74A.4030 Paymentby sender to receiving bank
74A.4040 Obligationof beneficiary’s bank to pay and give notice to beneficiary
74A.4050 Paymentby beneficiary’s bank to beneficiary
74A.4060 Paymentby originator to beneficiary; discharge of underlying obligation
MISCELLANEOUSPROVISIONS
74A.5010 Variationby agreement and effect of funds-transfer system rule
74A.5020 Creditorprocess served on receiving bank; setoff by beneficiary’s bank
74A.5030 Injunctionor restraining order with respect to funds transfer
74A.5040 Orderin which items and payment orders may be charged to account; order ofwithdrawals from account
74A.5050 Preclusionof objection to debit of customer’s account
74A.5060 Rateof interest
74A.5070 Choiceof law
GENERALPROVISIONS
74A.1010Short title.This chapter may be cited as Uniform Commercial Code–Funds Transfers. [1991c.442 §1]
74A.1020Subject matter.Except as otherwise provided in ORS 74A.1080, this chapter applies to fundstransfers defined in ORS 74A.1040. [1991 c.442 §2]
74A.1030Payment order; definitions. (1) As used in this chapter:
(a)“Beneficiary” means the person to be paid by the beneficiary’s bank.
(b)“Beneficiary’s bank” means the bank identified in a payment order in which anaccount for the beneficiary is to be credited pursuant to the order or whichotherwise is to make payment to the beneficiary if the order does not providefor payment to an account.
(c)“Payment order” means an instruction of a sender to a receiving bank,transmitted orally, electronically or in writing, to pay, or to cause anotherbank to pay, a fixed or determinable amount of money to a beneficiary if:
(A)The instruction does not state a condition for payment to the beneficiary otherthan time of payment;
(B)The receiving bank is to be reimbursed by debiting an account of, or otherwisereceiving payment from, the sender; and
(C)The instruction is transmitted by the sender directly to the receiving bank orto an agent, funds-transfer system or communication system for transmittal tothe receiving bank.
(d)“Receiving bank” means the bank to which the sender’s instruction is addressed.
(e)“Sender” means the person giving the instruction to the receiving bank.
(2)If an instruction complying with subsection (1)(c) of this section is to makemore than one payment to a beneficiary, the instruction is a separate paymentorder with respect to each payment.
(3)A payment order is issued when it is sent to the receiving bank. [1991 c.442 §3]
74A.1040Funds transfer; definitions. As used in this chapter:
(1)“Funds transfer” means the series of transactions, beginning with theoriginator’s payment order, made for the purpose of making payment to thebeneficiary of the order. The term includes any payment order issued by theoriginator’s bank or an intermediary bank intended to carry out the originator’spayment order. A funds transfer is completed by acceptance by the beneficiary’sbank of a payment order for the benefit of the beneficiary of the originator’spayment order.
(2)“Intermediary bank” means a receiving bank other than the originator’s bank orthe beneficiary’s bank.
(3)“Originator” means the sender of the first payment order in a funds transfer.
(4)“Originator’s bank” means:
(a)The receiving bank to which the payment order of the originator is issued ifthe originator is not a bank; or
(b)The originator if the originator is a bank. [1991 c.442 §4]
74A.1050Other definitions.(1) As used in this chapter:
(a)“Authorized account” means a deposit account of a customer in a bank designatedby the customer as a source of payment of payment orders issued by the customerto the bank. If a customer does not so designate an account, any account of thecustomer is an authorized account if payment of a payment order from thataccount is not inconsistent with a restriction on the use of that account.
(b)“Bank” means a financial institution, as defined in ORS 706.008. A branch orseparate office of a bank is a separate bank for purposes of this chapter.
(c)“Customer” means a person, including a bank, having an account with a bank orfrom whom a bank has agreed to receive payment orders.
(d)“Funds-transfer business day” of a receiving bank means the part of a dayduring which the receiving bank is open for the receipt, processing andtransmittal of payment orders and cancellations and amendments of paymentorders.
(e)“Funds-transfer system” means a wire transfer network, automated clearing house,or other communication system of a clearing house or other association of banksthrough which a payment order by a bank may be transmitted to the bank to whichthe order is addressed.
(f)“Prove” with respect to a fact means to meet the burden of establishing thefact.
(2)Other definitions applying to this chapter and the sections in which theyappear are:
“Acceptance” ORS74A.2090
“Beneficiary” ORS74A.1030
“Beneficiary’sbank” ORS 74A.1030
“Executed” ORS74A.3010
“Executiondate” ORS 74A.3010
“Fundstransfer” ORS 74A.1040
“Funds-transfersystem rule” ORS 74A.5010
“Intermediarybank” ORS 74A.1040
“Originator” ORS74A.1040
“Originator’sbank” ORS 74A.1040
“Paymentby beneficiary’s
bankto beneficiary” ORS 74A.4050
“Paymentby originator to
beneficiary” ORS74A.4060
“Paymentby sender
toreceiving bank” ORS 74A.4030
“Paymentdate” ORS 74A.4010
“Paymentorder” ORS 74A.1030
“Receivingbank” ORS 74A.1030
“Securityprocedure” ORS 74A.2010
“Sender” ORS74A.1030
(3)The following definitions in ORS chapter 74 apply to this chapter and ORS71.1010:
“Clearinghouse” ORS 74.1040
“Item” ORS74.1040
“Suspendspayments” ORS 74.1040
(4)In addition ORS chapter 71 contains general definitions and principles ofconstruction and interpretation applicable throughout this chapter. [1991 c.442§5; 1997 c.631 §381; 2009 c.181 §46a]
74A.1060Time payment order is received. (1) The time of receipt of a paymentorder or communication canceling or amending a payment order is determined bythe rules applicable to receipt of a notice stated in ORS 71.2020. A receivingbank may fix a cut-off time or times on a funds-transfer business day for thereceipt and processing of payment orders and communications canceling oramending payment orders. Different cut-off times may apply to payment orders,cancellations or amendments, or to different categories of payment orders,cancellations or amendments. A cut-off time may apply to senders generally ordifferent cut-off times may apply to different senders or categories of paymentorders. If a payment order or communication canceling or amending a paymentorder is received after the close of a funds-transfer business day or after theappropriate cut-off time on a funds-transfer business day, the receiving bankmay treat the payment order or communication as received at the opening of thenext funds-transfer business day.
(2)If this chapter refers to an execution date or payment date or state a day onwhich a receiving bank is required to take action, and the date or day does notfall on a funds-transfer business day, the next day that is a funds-transferbusiness day is treated as the date or day stated, unless the contrary isstated in this chapter. [1991 c.442 §6; 2009 c.181 §47]
74A.1070Federal Reserve regulations and operating circulars. Regulations ofthe Board of Governors of the Federal Reserve System and operating circulars ofthe Federal Reserve Banks supersede any inconsistent provision of this chapterto the extent of the inconsistency. [1991 c.442 §7]
74A.1080Exclusion of consumer transactions covered by federal law. This chapterdoes not apply to a funds transfer any part of which is governed by theElectronic Fund Transfer Act of 1978 (Title XX, P.L. 95.630, 92 Stat. 3728, 15U.S.C. §1693 et seq.). [1991 c.442 §8]
ISSUEAND ACCEPTANCE OF PAYMENT ORDER
74A.2010Security procedure.(1) “Security procedure” means a procedure established by agreement of acustomer and a receiving bank for the purpose of:
(a)Verifying that a payment order or communication amending or canceling a paymentorder is that of the customer; or
(b)Detecting error in the transmission or the content of the payment order orcommunication.
(2)A security procedure may require the use of algorithms or other codes, identifyingwords or numbers, encryption, call-back procedures or similar security devices.Comparison of a signature on a payment order or communication with anauthorized specimen signature of the customer is not by itself a securityprocedure. [1991 c.442 §9]
74A.2020Authorized and verified payment orders. (1) A payment order received by thereceiving bank is the authorized order of the person identified as sender ifthat person authorized the order or is otherwise bound by it under the law ofagency.
(2)If a bank and its customer have agreed that the authenticity of payment ordersissued to the bank in the name of the customer as sender will be verifiedpursuant to a security procedure, a payment order received by the receivingbank is effective as the order of the customer, whether or not authorized, if:
(a)The security procedure is a commercially reasonable method of providingsecurity against unauthorized payment orders; and
(b)The bank proves that it accepted the payment order in good faith and incompliance with the security procedure and any written agreement or instructionof the customer restricting acceptance of payment orders issued in the name ofthe customer.
(3)The bank is not required to follow an instruction that violates a written agreementwith the customer or notice of which is not received at a time and in a manneraffording the bank a reasonable opportunity to act on it before the paymentorder is accepted.
(4)Commercial reasonableness of a security procedure is a question of law to bedetermined by considering the wishes of the customer expressed to the bank, thecircumstances of the customer known to the bank, including the size, type andfrequency of payment orders normally issued by the customer to the bank,alternative security procedures offered to the customer, and securityprocedures in general use by customers and receiving banks similarly situated.A security procedure is deemed to be commercially reasonable if:
(a)The security procedure was chosen by the customer after the bank offered, andthe customer refused, a security procedure that was commercially reasonable forthat customer; and
(b)The customer expressly agreed in writing to be bound by any payment order,whether or not authorized, issued in its name and accepted by the bank incompliance with the security procedure chosen by the customer.
(5)The term “sender” in this chapter includes the customer in whose name a paymentorder is issued if the order is the authorized order of the customer undersubsection (1) of this section, or it is effective as the order of the customerunder subsection (2) of this section.
(6)This section applies to amendments and cancellations of payment orders to thesame extent it applies to payment orders.
(7)Except as provided in this section and ORS 74A.2030, rights and obligationsarising under this section or ORS 74A.2030 may not be varied by agreement. [1991c.442 §10]
74A.2030Unenforceability of certain verified payment orders. (1) If anaccepted payment order is not, under ORS 74A.2020, an authorized order of acustomer identified as sender, but is effective as an order of the customerpursuant to ORS 74A.2020, the following rules apply:
(a)By express written agreement, the receiving bank may limit the extent to whichit is entitled to enforce or retain payment of the payment order.
(b)The receiving bank is not entitled to enforce or retain payment of the paym