2025 Session
Last amended: 1990 session
§ 336.4A-504 — Order in Which Items and Payment Orders May Be Charged to Account; Order of Withdrawals From Account
Plain-Language Summary
If a funds transfer is completed but the originator is not obligated to pay (e.g., because the payment order was unauthorized), the beneficiary's bank must refund the payment to the originator's bank.
336.4A-504 ORDER IN WHICH ITEMS AND PAYMENT ORDERS MAY BE CHARGED TO ACCOUNT; ORDER OF WITHDRAWALS FROM ACCOUNT.
(a) If a receiving bank has received more than one payment order of the sender or one or more payment orders and other items that are payable from the sender’s account, the bank may charge the sender’s account with respect to the various orders and items in any sequence.
(b) In determining whether a credit to an account has been withdrawn by the holder of the account or applied to a debt of the holder of the account, credits first made to the account are first withdrawn or applied.
History:
History: History:
1990 c 582 art 1 s 35
Practical Notes
If a wire transfer was unauthorized, the banks must reverse it and refund the money up the chain.