Category Archives: UCC

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Alabama Supreme Court Holds Check Encoding Warranty Shifts Liability for Encoding Error

On September 30, 2014, the Alabama Supreme Court issued an important decision regarding which financial institution will bear the burden of a check encoding error under the check-encoding warranty found in Alabama’s U.C.C. Article 4.  According to the Alabama Supreme Court, this case is truly a case of first impression as there are no reported … Continue Reading

Court Rejects “Transactional Analysis” as Requirement for Commercially Reasonable Security Procedure in Processing Wire Transfers

We continue to see an increase in claims against financial institutions for fraudulent electronic payment orders.  Typically these claims involve large sums of money wired to overseas banks and quickly collected by unknown individuals.  Under U.C.C. Section 4A-204, a bank will be liable for such payment orders unless it falls within one of two exceptions.  … Continue Reading

11th Circuit Affirms that Host State Consumer Protection Statutes Are Preempted as to Out-of-State State Chartered Banks to Same Extent as National Banks.

In recent years, a number of courts have held that the National Bank Act, 12 U.S.C. 21, et seq., (“NBA”), preempts application of state consumer protection laws against national banks where the state law “significantly impaired” the purpose of the federal act or its implementing regulations.  In Baptista v. J.P. Morgan Chase Bank, N.A., 640 … Continue Reading