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Can you summarize WARC 62A.4-401?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER > When bank may charge customer's account.
Short Summary
This legal document, part of the Revised Code of Washington, specifically addresses the relationship between a payor bank and its customer regarding bank deposits and collections. It outlines the circumstances under which a bank may charge a customer’s account, even if it creates an overdraft. An item is considered properly payable if it is authorized by the customer and aligns with any customer-bank agreement. The document also states that a customer is not liable for an overdraft if they neither signed the item nor benefited from its proceeds. Additionally, it allows a bank to charge a check from a customer’s account, even if payment was made before the check’s date, unless the customer has given notice of postdating. The notice must be received in a timely manner to afford the bank an opportunity to act on it. The document prohibits banks from charging fees for postdating notices and holds them liable for damages if they charge a postdated check before the stated date. Furthermore, it specifies that a bank acting in good faith may charge its customer’s account based on the original or completed terms of an altered or completed item, unless it has notice of improper completion. Overall, this document provides guidelines and regulations for the relationship between a bank and its customer regarding account charges and check payments.
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?
Damages for loss resulting from improper charging of a postdated check
Jurisdiction
Washington