§ 336.4A-504 — Order in Which Items and Payment Orders May Be Charged to Account; Order of Withdrawals From Account
Plain-Language Summary
This section addresses the order in which a bank may charge a customer's account and how withdrawals are tracked. When a receiving bank has more than one payment order, or payment orders plus other items payable from the same account, it may charge the account for those orders and items in any sequence it chooses. When deciding whether a credit to the account has been withdrawn or applied to a debt, the bank treats the earliest credits as the first ones withdrawn or applied (first in, first out).
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(b) In determining whether a credit to an account has been withdrawn by the holder of the account or applied to a debt of the holder of the account, credits first made to the account are first withdrawn or applied.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