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Can you summarize WVCO 46-4-401?
BANK DEPOSITS AND COLLECTIONS. > When bank may charge customer's account.
Short Summary
This legal document, part of the West Virginia Code’s Uniform Commercial Code, governs bank deposits and collections. It outlines the circumstances under which a bank may charge a customer’s account, even if it creates an overdraft. The bank can charge against the account if the item is properly payable, authorized by the customer, and in accordance with any agreement between the customer and bank. The customer is not liable for the amount of an overdraft if they neither signed the item nor benefited from its proceeds. The bank can also charge against the 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 notice must be received by the bank in a timely manner to afford them a reasonable opportunity to act on it. The bank is liable for damages if it charges against the account before the date stated in the notice. Additionally, the document specifies that a bank that makes payment to a holder in good faith may charge the customer’s account according to the original terms of an altered item or the terms of a completed 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 dishonor of subsequent items under section 4-402 if it charges against the account of a customer a check before the date stated in the notice of postdating.
Jurisdiction
West Virginia