Exam 27: Checks, the Banking System, and E-Money

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

When a check "bounces," its holder can resubmit the check later, hop?ing that suf?ficient funds will be available.

First Community Bank agrees to accept a check by setting aside suffi?cient funds to cover the amount. This check is considered

An oral stop payment order is valid for thirty days.

Dina's debit card, issued by Eagle Bank, is stolen and used without Dina's permission. Dina tells Eagle Bank within thirty days. Dina may be re?quired to pay no more than

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

Fact Pattern 27-1B Tom draws a check, on his account in State Bank in New York, payable to Digital Computers, 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 27-1B. Digital's bank is

A bank is obligated to pay an uncertified check presented less than six months from its date.

First National Bank receives a check drawn on the account of Get-Rich Industries, Inc., one of the bank's customers, at 3 p.m. Friday. Harry, the pre?senter of the check, is not one of the bank's customers. The bank uses de?ferred posting with a 2 p.m. cutoff hour. If it decides to dis?honor the check, it must do so by midnight

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

Under the Check Clearing in the 21st Century Act, a substitute check is the legal equivalent of an original check.

First State Bank has fourteen branch offices. First State must establish market areas contiguous to these offices under

The bank on which a check is drawn is the payor bank.

A check is a special type of certificate of deposit.

A person who writes a bad check is subject to a civil suit only.

Joy steals a check from Kyle, forges his signature, and transfers the check to Loco Loans, Inc., for value. Unaware that the signature is not Kyle's, Loco Loans presents the check to Metro Bank, the drawee, which cashes the check. Kyle discovers the forgery and insists that Metro recredit his account. Can Metro refuse? If not, from whom can the bank recover?

Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Una's account in Verity Bank. Most likely, if the bank pays the check

The Federal Reserve System acts as a clearinghouse where banks exchange checks.

Steve steals one of Tricia's checks and forges her signature. Tricia's bank, Unity Bank, pays the check. Tricia can recover from

John writes a check to Kay as payment for a DVD player but soon discov?ers the player is broken. He goes to the drawee bank and orally author?izes Larry, a bank officer, to stop payment on the check. This order is valid for