Exam 17: Checks and Banking in the Digital Age

Stored-value cards are a form of digital cash.

A bank has no right to charge a customer's account for the amount of a stale check.

Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. First National 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 State Bank. -Refer to Fact Pattern 17-2.When Digital's bank received the check,it was required to pass it on

The death of a customer revokes a bank's authority to pay an item.

Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.

If a customer's debit card is lost or stolen and used withoiut permission,the customer shall be required to pay no more than $50.

Thelma signs a check "pay to the order of Uri" drawn on Thelma's account in Verity Bank.Thelma has $400 in her account but the amount of the check is $500,which the bank pays.This is

Liu signs a check "pay to the order of Marv" drawn on Liu's account in National Bank.Liu later orders National not to pay the check,but the bank pays it over Liu's order.Subsequent checks written on Liu's account "bounce." Most likely liable for the costs to Liu is

Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

Dora writes a check for $100 drawn on Eastern Bank and presents it to Fast Cash,Inc. ,for payment.If the check is not backed by sufficient funds,Dora may be prosecuted for

A bank that fails to detect an alteration to its customer's check is liable to the customer for the loss.

Clyde issues a check payable to Discount Mart.Elle,Discount's cashier,forges the store's indorsement and deposits the check in her bank account.Clyde's bank,First State Bank,pays the check.Clyde can recover from

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

Currently,it is not clear which,if any,laws apply to the security of e-money payment information.

Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. First National 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 State Bank. -Refer to Fact Pattern 17-2.Digital's bank is

Dhani signs a check "pay to the order of Etan" drawn on Dhani's account in First State Bank and dates the check "May 1." Etan presents the check to the bank for payment on December 15.This is

UCC Articles 3 and 4 govern checks.

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

Generally,a cash deposit is not available for withdrawal until the next business day.

When a check "bounces," its holder can resubmit the check later,hoping that sufficient funds will be available.