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Can you summarize IACO 554.12208?
UNIFORM COMMERCIAL CODE > Misdescription of intermediary bank or beneficiarys bank.
Short Summary
This subsection of the Iowa Code, specifically the Uniform Commercial Code, governs payment orders that identify an intermediary bank or the beneficiary’s bank. It provides guidelines for receiving banks, sending banks, and non-bank senders regarding the proper identification of the intermediary or beneficiary’s bank. If the bank is identified only by an identifying number, the receiving bank may rely on the number without determining whether it identifies a bank. The sender is responsible for compensating the receiving bank for any loss or expenses resulting from the reliance on the number. If the name and number identify different persons, the receiving bank may still rely on the number if it does not know about the discrepancy. However, if the receiving bank proves that the sender had notice of the discrepancy, the sender’s rights and obligations are governed as if they were a bank. The receiving bank may also rely on the name as the proper identification unless it knows that the name and number identify different persons. Any reliance on the name or number when the receiving bank knows they identify different persons is considered a breach of obligation. Overall, this subsection provides clarity on the identification requirements for intermediary and beneficiary banks in payment orders.
Whom does it apply to?
Receiving banks, sending banks, and non-bank senders
What does it govern?
Payment orders identifying an intermediary bank or the beneficiarys bank
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The sender shall compensate the receiving bank for any loss and expenses incurred by the receiving bank as a result of the receiving banks reliance on the number in executing or attempting to execute the order.
Jurisdiction
Iowa