Exam 28: Banking in the Digital Age

On Monday, Foster deposits in his account at Guaranty Bank a local check for $500. After 5:00 p.m. on Friday, from these funds, Foster can withdraw no more than

Albert buys a surround sound system from his neighbor George at George's garage sale. Albert writes George a check for $250 for the sound system. George is

Checks are usually three party instruments.

Shakira issues a check drawn on Thrifty Bank to Ranch & Farm Supply to pay for a rototiller. Later, Shakira discovers a defect in the device and orders Thrifty to stop payment on the check. Shakira does not renew the order, and the bank clears the check eight months later. The bank

Flores forges Grendel's signature on a check "payable to the order of Flores" drawn on Grendel's account in Harbortown Bank. Most likely, if the bank pays the check

A bank may not charge a postdated check against a customer's account unless the customer notifies the bank, in a timely manner, to pay the check before the stated date.

Even if the bank pays a check in spite of a stop-payment order, the bank will not be obligated to recredit the customer's account.

If a person does not consent, a federal agency normally must obtain a warrant to access his or her financial records.

If a bank pays a check in spite of a stop-payment order, the bank is liable only for amount of the actual loss suffered by the drawer because of the wrongful payment.

Fact Pattern 28-2B (Questions B16-B18 apply) Belle draws a check on her account in Capital Credit Bank in New York, payable to Distribution Marketing, Inc., in San Francisco. Distribution Marketing deposits the check in its ac?count at Equity Bank. Equity Bank deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank sends the check to Capital Credit. -Refer to Fact Pattern 28-2B. When Equity Bank received the check, it was required to pass it on

Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. Like most checks, this check is

Oscar buys a new HD TV from Priceless Retail Mart, using the means that accounts for more retail payments than any other. This means of payment is

Fact Pattern 28-1B (Questions B8 and B9 apply) Dana takes her car to Efficient Auto Repair Service, which repairs the car and bills Dana for $500. She writes out a check drawn on First Choice Bank, but later, believing that Efficient Auto did not repair the car properly, issues a stop-payment order. -Refer to Fact Pattern 28-1B. If First Choice pays the check, the bank

Few laws directly apply to the security of e-money payment information and e-money issuers' financial records.

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

Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to Elegant Jewelers for payment. If the check is not backed by sufficient funds, Cleo may be prosecuted for

Qiara steals a check from Reese, forges his signature, and transfers the check to Salon Beauteous, a beauty and barber salon, for value. Unaware that the signature is not Reese's, Salon Beauteous presents the check to Town & Country Bank, the drawee, which cashes the check. Reese discovers the forgery and insists that his bank recredit his account. Can the bank refuse? If not, from whom can the bank recover?

Fact Pattern 28-2B (Questions B16-B18 apply) Belle draws a check on her account in Capital Credit Bank in New York, payable to Distribution Marketing, Inc., in San Francisco. Distribution Marketing deposits the check in its ac?count at Equity Bank. Equity Bank deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank sends the check to Capital Credit. -Refer to Fact Pattern 28-2B. Central City, Distribution Marketing's bank, is

Kenyon steals one of Lavender's checks and forges her signature. Lavender's bank, Metro Bank, pays the check. Lavender can recover from

A check is a special type of draft that is drawn on a bank, ordering the bank to pay a fixed amount of money on demand.