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Can you summarize DCCO 28:4-401?
Collection of Items: Payor Banks. > When bank may charge customers account.
Short Summary
This legal document, part of the Uniform Commercial Code, governs the circumstances under which a bank may charge a customer’s account. According to the document, a bank may charge against the customer’s account an item that is properly payable, even if it creates an overdraft. An item is considered properly payable if it is authorized by the customer and complies with any agreement between the customer and the bank. The document also states that a customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. Additionally, the document allows a bank to charge against the customer’s account a postdated check, unless the customer has given notice to the bank of the postdating. If a bank charges against the account a check before the date stated in the notice of postdating, the bank may be liable for damages. Furthermore, the document addresses the bank’s ability to charge the customer’s account based on the original or completed terms of an altered item, as long as the bank is not aware of any improper completion. Overall, this document provides guidelines for banks and their customers regarding the charging of customer accounts for various types of items.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging a customer's account for items that are properly payable, including overdrafts, postdated checks, and altered items
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank may be liable for damages for dishonor of subsequent items if it charges against the customer's account a check before the date stated in the notice of postdating.
Jurisdiction
Washington, D.C.