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Illinois Compiled Statutes
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COMMERCIAL CODE (810 ILCS 5/) Uniform Commercial Code. 810 ILCS 5/Art. 4A Pt. 5
(810 ILCS 5/Art. 4A Pt. 5 heading)
PART 5.
MISCELLANEOUS PROVISIONS
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810 ILCS 5/4A-501
(810 ILCS 5/4A-501) (from Ch. 26, par. 4A-501)
Sec. 4A-501.
Variation by agreement and effect of funds transfer
system rule.
(a) Except as otherwise provided in this Article, the
rights and obligations of a party to a funds transfer may be varied by
agreement of the affected party.
(b) "Funds transfer system rule" means a rule of an association of banks
(i) governing transmission of payment orders by means of a funds transfer
system of the association or rights and obligations with respect to those
orders, or (ii) to the extent the rule governs rights and obligations
between banks that are parties to a funds transfer in which a Federal
Reserve Bank, acting as an intermediary bank, sends a payment order to the
beneficiary's bank. Except as otherwise provided in this Article, a
funds transfer system rule governing rights and obligations between
participating banks using the system may be effective even if the rule
conflicts with this Article and indirectly affects another party to the
funds transfer who does not consent to the rule. A funds transfer system
rule may also govern rights and obligations of parties other than
participating banks using the system to the extent stated in Sections
4A-404(c), 4A-405(d), and 4A-507(c).
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-502
(810 ILCS 5/4A-502) (from Ch. 26, par. 4A-502)
Sec. 4A-502.
Creditor process served on receiving bank; setoff by
beneficiary's bank.
(a) As used in this Section, "creditor process" means levy, attachment,
garnishment, notice of lien, sequestration, or similar process issued by or
on behalf of a creditor or other claimant with respect to an account.
(b) This subsection applies to creditor process with respect to an
authorized account of the sender of a payment order if the creditor process
is served on the receiving bank. For the purpose of determining rights with
respect to the creditor process, if the receiving bank accepts the payment
order the balance in the authorized account is deemed to be reduced by the
amount of the payment order to the extent the bank did not otherwise
receive payment of the order, unless the creditor process is served at a
time and in a manner affording the bank a reasonable opportunity to act on
it before the bank accepts the payment order.
(c) If a beneficiary's bank has received a payment order for payment to
the beneficiary's account in the bank, the following rules apply:
(1) The bank may credit the beneficiary's account. | | The amount credited may be set off against an obligation owed by the beneficiary to the bank or may be applied to satisfy creditor process served on the bank with respect to the account.
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(2) The bank may credit the beneficiary's account and
| | allow withdrawal of the amount credited unless creditor process with respect to the account is served at a time and in a manner affording the bank a reasonable opportunity to act to prevent withdrawal.
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(3) If creditor process with respect to the
| | beneficiary's account has been served and the bank has had a reasonable opportunity to act on it, the bank may not reject the payment order except for a reason unrelated to the service of process.
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(d) Creditor process with respect to a payment by the originator to the
beneficiary pursuant to a funds transfer may be served only on the
beneficiary's bank with respect to the debt owed by that bank to the
beneficiary. Any other bank served with the creditor process is not obliged
to act with respect to the process.
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-503
(810 ILCS 5/4A-503) (from Ch. 26, par. 4A-503)
Sec. 4A-503.
Injunction or restraining order with respect to funds
transfer. For proper cause and in compliance with applicable law, a court
may restrain (i) a person from issuing a payment order to initiate a funds
transfer, (ii) an originator's bank from executing the payment order of the
originator, or (iii) the beneficiary's bank from releasing funds to the
beneficiary or the beneficiary from withdrawing the funds. A court may not
otherwise restrain a person from issuing a payment order, paying or
receiving payment of a payment order, or otherwise acting with respect to a
funds transfer.
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-504
(810 ILCS 5/4A-504) (from Ch. 26, par. 4A-504)
Sec. 4A-504.
Order in which items and payment orders may be charged to
account; order of withdrawals from account.
(a) If a receiving bank has received more than one payment order of the
sender or one or more payment orders and other items that are payable from
the sender's account, the bank may charge the sender's account with respect
to the various orders and items in any sequence.
(b) In determining whether a credit to an account has been withdrawn by
the holder of the account or applied to a debt of the holder of the
account, credits first made to the account are first withdrawn or applied.
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-505
(810 ILCS 5/4A-505) (from Ch. 26, par. 4A-505)
Sec. 4A-505.
Preclusion of objection to debit of customer's
account. If a receiving bank has received payment from its
customer with respect to a payment order issued in the name
of the customer as sender and accepted by the bank, and the
customer received notification reasonably identifying the order,
the customer is precluded from asserting that the bank is not
entitled to retain the payment unless the customer notifies the
bank of the customer's objection to the payment within one year
after the notification was received by the customer.
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-506
(810 ILCS 5/4A-506) (from Ch. 26, par. 4A-506)
Sec. 4A-506.
Rate of interest.
(a) If, under this Article, a receiving
bank is obliged to pay interest with respect to a payment order issued to
the bank, the amount payable may be determined (i) by agreement of the
sender and receiving bank, or (ii) by a funds transfer system rule if the
payment order is transmitted through a funds transfer system.
(b) If the amount of interest is not determined by an agreement or rule
as stated in subsection (a), the amount is calculated by multiplying the
applicable Federal Funds rate by the amount on which interest is payable,
and then multiplying the product by the number of days for which interest
is payable. The applicable Federal Funds rate is the average of the Federal
Funds rates published by the Federal Reserve Bank of New York for each of
the days for which interest is payable divided by 360. The Federal Funds
rate for any day on which a published rate is not available is the same as
the published rate for the next preceding day for which there is a
published rate. If a receiving bank that accepted a payment order is
required to refund payment to the sender of the order because the funds
transfer was not completed, but the failure to complete was not due to any
fault by the bank, the interest payable is reduced by a percentage equal to
the reserve requirement on deposits of the receiving bank.
(Source: P.A. 86-1291.)
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810 ILCS 5/4A-507
(810 ILCS 5/4A-507) (from Ch. 26, par. 4A-507)
Sec. 4A-507. Choice of law.
(a) The following rules apply unless the
affected parties otherwise agree or subsection (c) applies:
(1) The rights and obligations between the sender of | | a payment order and the receiving bank are governed by the law of the jurisdiction in which the receiving bank is located.
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(2) The rights and obligations between the
| | beneficiary's bank and the beneficiary are governed by the law of the jurisdiction in which the beneficiary's bank is located.
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(3) The issue of when payment is made pursuant to a
| | funds transfer by the originator to the beneficiary is governed by the law of the jurisdiction in which the beneficiary's bank is located.
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(b) If the parties described in each paragraph of subsection (a) have
made an agreement selecting the law of a particular jurisdiction to govern
rights and obligations between each other, the law of that jurisdiction
governs those rights and obligations, whether or not the payment order or
the funds transfer bears a reasonable relation to that jurisdiction.
(c) A funds transfer system rule may select the law of a particular
jurisdiction to govern (i) rights and obligations between participating
banks with respect to payment orders transmitted or processed through the
system, or (ii) the rights and obligations of some or all parties to a
funds transfer any part of which is carried out by means of the system. A
choice of law made pursuant to clause (i) is binding on participating
banks. A choice of law made pursuant to clause (ii) is binding on the
originator, other sender, or a receiving bank having notice that the
funds transfer system might be used in the funds transfer and of the choice
of law by the system when the originator, other sender, or receiving bank
issued or accepted a payment order. The beneficiary of a funds transfer is
bound by the choice of law if, when the funds transfer is initiated, the
beneficiary has notice that the funds transfer system might be used in the
funds transfer and of the choice of law by the system. The law of a
jurisdiction selected pursuant to this subsection may govern, whether or
not that law bears a reasonable relation to the matter in issue.
(d) In the event of inconsistency between an agreement under subsection
(b) and a choice of law rule under subsection (c), the agreement under
subsection (b) prevails.
(e) If a funds transfer is made by use of more than one funds transfer
system and there is inconsistency between choice of law rules of the
systems, the matter in issue is governed by the law of the selected
jurisdiction that has the most significant relationship to the matter in issue.
(Source: P.A. 97-813, eff. 7-13-12.)
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