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Can you summarize IC 26-1-4-401?
Bank Deposits and Collections > When bank may charge customer's account
Short Summary
This section of the Indiana Code governs the charging of a customer’s account by a bank. A bank is allowed to charge against the customer’s account for items that are properly payable, authorized by the customer, and in accordance with any agreement between the customer and the bank. The customer is not liable for overdrafts if they did not sign the item or benefit from its proceeds. The bank may charge a check from the customer’s account even if payment was made before the date of the check, unless the customer has given notice of postdating. If the bank charges the check before the date stated in the notice, the bank is liable for damages. Additionally, a bank that makes payment to a holder in good faith may charge the customer’s account according to the original or completed terms of the item, unless the bank has notice of improper completion.
Whom does it apply to?
Customers and banks
What does it govern?
Bank Deposits and Collections
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank may be liable for damages for charging a check before the date stated in the notice of postdating.
Jurisdiction
Indiana