70A-4a-403 - Payment by sender to receiving bank.
70A-4a-403. Payment by sender to receiving bank.
(1) Payment of the sender's obligation under Section 70A-4a-402 to pay the receivingbank occurs as follows:
(a) If the sender is a bank, payment occurs when the receiving bank receives finalsettlement of the obligation through a Federal Reserve Bank or through a funds transfer system.
(b) If the sender is a bank and the sender:
(i) credited an account of the receiving bank with the sender; or
(ii) caused an account of the receiving bank in another bank to be credited, paymentoccurs when the credit is withdrawn or, if not withdrawn, at midnight of the day on which thecredit is withdrawable and the receiving bank learns of that fact.
(c) If the receiving bank debits an account of the sender with the receiving bank, paymentoccurs when the debit is made to the extent the debit is covered by a withdrawable credit balancein the account.
(2) If the sender and receiving bank are members of a funds transfer system that netsobligations multilaterally among participants, the receiving bank receives final settlement whensettlement is complete in accordance with the rules of the system. The obligation of the sender topay the amount of a payment order transmitted through the funds transfer system may besatisfied, to the extent permitted by the rules of the system, by setting off and applying againstthe sender's obligation the right of the sender to receive payment from the receiving bank of theamount of any other payment order transmitted to the sender by the receiving bank through thefunds transfer system. The aggregate balance of obligations owed by each sender to eachreceiving bank in the funds transfer system may be satisfied, to the extent permitted by the rulesof the system, by setting off and applying against that balance the aggregate balance ofobligations owed to the sender by other members of the system. The aggregate balance isdetermined after the right of setoff stated in the second sentence of this subsection has beenexercised.
(3) If two banks transmit payment orders to each other under an agreement thatsettlement of the obligations of each bank to the other under Section 70A-4a-402 will be made atthe end of the day or other period, the total amount owed with respect to all orders transmitted byone bank shall be set off against the total amount owed with respect to all orders transmitted bythe other bank. To the extent of the setoff each bank has made payment to the other.
(4) In any case not covered by Subsection (1), the time when payment of the sender'sobligation under Subsection 70A-4a-402(2) or (3) occurs is governed by applicable principles oflaw that determine when an obligation is satisfied.
Enacted by Chapter 294, 1990 General Session