Ask Reggi Your Question Now
Can you summarize IACO 554.12506?
UNIFORM COMMERCIAL CODE > Rate of interest.
Short Summary
This legal provision, found in the Iowa Code under the Uniform Commercial Code, governs the rate of interest applicable to payment orders issued to receiving banks. The amount of interest payable can be determined by agreement between the sender and receiving bank or by a funds-transfer system rule if the payment order is transmitted through such a system. If the interest amount is not determined by an agreement or rule, it is calculated by multiplying the applicable federal funds rate by the amount on which interest is payable, and then multiplying the product by the number of days for which interest is payable. The applicable federal funds rate is determined by averaging the federal funds rates published by the federal reserve bank of New York for each of the days for which interest is payable, divided by three hundred sixty. If a receiving bank is required to refund payment to the sender due to an incomplete funds transfer not caused by the bank’s fault, the interest payable is reduced by a percentage equal to the reserve requirement on deposits of the receiving bank.
Whom does it apply to?
Receiving banks
What does it govern?
Rate of interest
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Iowa