Exam 34: Checks and Electronic Transfers

On June 1, Dave Drawer writes a check to Pete Payee. The check is postdated to July 1. Nonetheless, Pete presents the check for payment at Dave's bank on June 15, and receives payment on that date. After Dave learns of this, he screams bloody murder, arguing that the check was not properly payable and that the bank should recredit his account. Is Dave right? Assume that the check is otherwise properly payable, and that Dave never told the bank about it before Pete presented it.

Wire transfer is used for transfer of funds across the country or around the world. This service is generally used by large business and financial institutions.

Under the recent amendments to Article 4, postdated checks:

A check on which one bank is the drawer and another bank is a drawee is a:

The time period within which a customer must report unauthorized customer signatures to the bank to get his account recredited is:

_____ is a financial management tool offered by banks and by third-party, Internet-based companies.

While receiving a properly drawn and payable check on a person's account, which of the following circumstances make it a necessity for the bank to honor the check?

Which of the following is most true about stop-payment orders?

_____ is a process which begins with the buyer giving the seller a check, and the seller using the information on that check to name itself as the payee and forwarding it for collection through an automated clearing house.

Mike buys a new $25,000 turbocharged Dodge Vampire for cash. The dealer requires a certified check for that amount, so Mike gets his bank to certify his check for $25,000. One day later, the bank goes bankrupt. Rather than trying to recover in bankruptcy, the dealer pursues Mike. One of the dealer's theories is that Mike is secondarily liable on the check, and that the bank's default makes Mike liable on the instrument. Is the bank right?

A drawer's written stop-payment order is valid for:

A bank may, but need not, pay any checks that are more than six months old.

The Federal Reserve operates a domestic wire transfer system known as Fedwire.

Banks can retain the legible copy of check for a period of:

Jim gave a postdated check dated December 30 to one of his creditors on December 22. However, the check was presented to Jim's bank on December 24, and the bank honored it. As a result, there was not enough money in his account to cover for another check he had written for December 27, and hence, the check bounced. The bank charged Jim a $20 fee for the bounced check. What is the bank's liability regarding this bounced check?

Which of the following do a certified check and a cashier's check have in common?

Banks are not required to disclose their funds availability policy to all of their customers.

Ben, a Big Bank checking account customer, wrote a check for $1,000 to Mia. At the time that Mia presents the check for payment at Big Bank, Ben has $1,500 in his account. However, the clerk mistakenly refuses to pay the check and stamps it NSF. Mia then goes to the local prosecutor, and Ben is later arrested for writing a bad check. Ben could recover from Big Bank the damages involved in his arrest, such as attorney's fees.

Under the Expedited Funds Availability Act, customers can draw upon checks deposited in their checking account within:

When there are insufficient funds in a drawer's account, and a check is presented to be honored, the bank can: