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Can you summarize KYRS 355.4-401?
Bank Deposits and Collections > When bank may charge customer's account.
Short Summary
This legal document, part of the Kentucky Revised Statutes, specifically falls under the section of the Uniform Commercial Code governing Bank Deposits and Collections. It outlines the circumstances under which a bank may charge a customer’s account. According to the document, a bank is allowed to charge against a customer’s account for 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 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 stated date, it may be liable for damages. The document also covers the bank’s liability when making payment to a holder in good faith. Overall, this document provides guidelines for when a bank may charge a customer’s account and the associated responsibilities and liabilities.
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
Kentucky