Exam 19: Checks and Banking in the Digital Age

E-Bank,an online financial institution,gives financial information about Paula and other customers to a federal agency without the customers' permission.E-Bank may be liable under

A drawer is liable to the holder of a check if the check is not honored.

Fact Pattern 19-3 Mike loses his National Bank access card. He realizes his loss the next day but waits a week to call National. Meanwhile, Opal finds and uses Mike's card to withdraw $3,000 from Mike's account. -Refer to Fact Pattern 19-3.When Mike receives his National statement,he demands that the bank investigate the matter and recredit his account.The bank

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

Generally,the funds represented by a deposited local check must be available for withdrawal within one business day.

Dru signs a check "pay to the order of Eppie" drawn on Dru's account in First Federal Bank.Greta forges Eppie's indorsement.First Federal pays the check.Most likely

Simon signs a check "pay to the order of Tilly" drawn on Simon's account in United Bank.Vela forges Tilly's indorsement,First Federal Bank cashes the check,and Vela disappears.United pays First Federal and debits Simon's account.Most likely,the ultimate loss will fall on

A financial institution must encode a returned check with certain information.

Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment.This instrument is the most common type of negotiable instrument,which is

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

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

A stale check is one that has been outstanding for longer than one month.