Print
Senate Study Bill 3054 - IntroducedA Bill ForAn Act 1relating to stopping payment on a negotiable instrument
2by using an electronic record in lieu of a writing.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 554.4403, Code 2018, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 2A. In addition to a stop-payment order
4made or renewed in writing as described in subsection 2, an
5equivalent stop-payment order may also be made or renewed
6as part of a record that is stored in an electronic medium,
7and submitted to the bank, which may include delivery via
8electronic transmission.
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
12This bill amends a provision in Article 4, Part 4, of the
13uniform commercial code (“UCC”) regulating the relationship
14between banks and its customers.
15Code section 554.4403 requires a customer or other
16authorized person to give the bank timely and adequate notice
17of stop-payment instructions (an “order”) either verbally or in
18writing. The order must be received by the bank in sufficient
19detail (describing the item or account) and within a reasonable
20time sufficient for it to act (some period between the time the
21item left the customer’s possession and before it is presented
22to the bank for payment from the customer’s account). A verbal
23stop-payment order lapses 14 days after it was given. A
24written stop-payment order lapses after six months following
25the date it was given. During the period that a verbal or
26written stop-payment order is effective, it may be renewed for
27any number of additional six-month periods but only if the
28order is given in writing during the effectiveness of the last
29order given.
30The bill amends Code section 554.4403 by allowing a customer
31or other authorized person to contact the customer’s bank by
32using an electronic “record” and submitting that record (e.g.,
33by electronic transmission such as email) to stop payment on an
34item on an equivalent basis to a written stop-payment order.
-1-da/rn
2by using an electronic record in lieu of a writing.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 554.4403, Code 2018, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 2A. In addition to a stop-payment order
4made or renewed in writing as described in subsection 2, an
5equivalent stop-payment order may also be made or renewed
6as part of a record that is stored in an electronic medium,
7and submitted to the bank, which may include delivery via
8electronic transmission.
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
12This bill amends a provision in Article 4, Part 4, of the
13uniform commercial code (“UCC”) regulating the relationship
14between banks and its customers.
15Code section 554.4403 requires a customer or other
16authorized person to give the bank timely and adequate notice
17of stop-payment instructions (an “order”) either verbally or in
18writing. The order must be received by the bank in sufficient
19detail (describing the item or account) and within a reasonable
20time sufficient for it to act (some period between the time the
21item left the customer’s possession and before it is presented
22to the bank for payment from the customer’s account). A verbal
23stop-payment order lapses 14 days after it was given. A
24written stop-payment order lapses after six months following
25the date it was given. During the period that a verbal or
26written stop-payment order is effective, it may be renewed for
27any number of additional six-month periods but only if the
28order is given in writing during the effectiveness of the last
29order given.
30The bill amends Code section 554.4403 by allowing a customer
31or other authorized person to contact the customer’s bank by
32using an electronic “record” and submitting that record (e.g.,
33by electronic transmission such as email) to stop payment on an
34item on an equivalent basis to a written stop-payment order.
-1-da/rn