Exam 28: Banking

When a customer makes a deposit into a checking account, the customer becomes a debtor, and the bank a creditor, for the amount deposited.

Whoever takes an instrument with a forged indorsement cannot become a holder because a forged indorsement does not transfer title.

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely

Bok buys an espresso machine from Coffee Gadgets, which bills him for $100. He writes out a check drawn on Dios Bank, but later, believing that the machine is defective, issues a stop-payment order. Dios

A paper check must be presented for payment-it cannot be retained at its place of deposit, with only its image or description presented electronically.

Elmer pays Fidelity Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is

Checks received after a certain time can be deferred for posting until the next banking day.

With respect to processing checks for payment, the Uniform Commercial Code governs the relationships of banks with

Ridge Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check. You can use it in the same way you would use the original check." This is

Electronic banking makes it easier to issue a stop-payment order.

Erin uses e-money consisting of funds stored on microchips in her laptop, phone, and tablet to pay bills. This effectively replaces physical cash with virtual cash in the form of

With a joint checking account, the bank can hold any joint-account owner liable for payment of an overdraft even if that owner did not sign the check or benefit from its proceeds.

Brady forges Cal's signature on a check "payable to the order of Brady" drawn on Cal's account in Downtown Bank. Cal's forged signature is

To avoid liability for negligence, a customer must examine monthly bank statements and canceled checks promptly and with reasonable care, and report any forged signatures to the bank.

When a bank certifies a check, the bank is agreeing in advance to accept the check when it is presented for payment and to make payment with funds reserved for the purpose.

Mara has a checking account at North Bank. Mara signs a check "payable to Ovid" drawn on Mara's account. North Bank is

Because issuing banks must honor cashier's checks when they are presented for payment, businesses sometimes use them as nearly the equivalent of cash.

Online payment systems are not yet among the most common types of electronic fund transfer systems.

If any financial institution, such as a brokerage house, handles a check for payment or collection, the check is covered by UCC Article 4.

A bank may contractually shift to its customer the risk of forged checks created electronically or otherwise by the use non-manual signatures.