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Can you summarize IACO 554.4214?
UNIFORM COMMERCIAL CODE > Right of charge-back or refund liability of collecting bank return of item.
Short Summary
This legal document, part of the Iowa Code’s Uniform Commercial Code, governs the rights and liabilities of collecting banks regarding charge-backs or refunds. It states that if a collecting bank has made provisional settlement with its customer for an item but fails to receive final settlement due to dishonor, suspension of payments by a bank, or other reasons, the bank may revoke the settlement, charge back the credited amount, or obtain a refund from its customer. The bank must return the item or send notification within a reasonable time to exercise these rights. If the return or notice is delayed, the bank may still exercise these rights but is liable for any resulting loss. The right to charge back or obtain a refund terminates when a settlement for the item is received by the bank. The document also mentions that a depositary bank that is also the payor may charge back the amount of an item or obtain a refund. The right to charge back is not affected by previous use of a credit or failure by any bank to exercise ordinary care. Failure to charge back or claim a refund does not affect other rights of the bank against the customer or any other party. Additionally, it specifies the calculation of charge-back or refund amounts when credit is given in dollars as the equivalent of a foreign currency. Overall, this document outlines the procedures and rights related to charge-backs and refunds for collecting banks and their customers.
Whom does it apply to?
Collecting banks and their customers
What does it govern?
Charge-back or refund rights and liabilities of collecting banks
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Iowa