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Can you summarize LARS 10.4-401?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMERS > When bank may charge customer's account
Short Summary
This legal document, found in the Louisiana Revised Statutes, governs the relationship between a payor bank and its customers in the context of bank deposits and collections. According to the document, a bank has the authority to charge a customer’s account for an item that is properly payable from that account, 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. Additionally, the bank may charge a customer’s account for a check that is otherwise properly payable, even if payment was made before the date of the check, unless the customer has given notice of postdating the check. If a bank charges against the account before the stated date, it may be liable for damages. The document also addresses the bank’s ability to charge the customer’s account based on the original or completed terms of an altered item, unless the bank has notice of improper completion. The document does not specify any penalties for non-compliance or violation of its provisions.
Whom does it apply to?
Banks and their customers
What does it govern?
Relationship between payor bank and its customers
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The document does not specify any penalties.
Jurisdiction
Louisiana