This division may be cited as Uniform Commercial Code—Funds Transfers.
Chapter 1Subject Matter and Definitions
Section § 11101
This section names this part of the law as the Uniform Commercial Code related to funds transfers. It establishes what this division will be referred to when discussing legal matters about transferring money.
Uniform Commercial Code funds transfers commercial transactions money transfers payment systems bank transfers financial transfers electronic funds wire transfers financial transactions
Section § 11102
This law section states that the rules in this division apply to funds transfers, as outlined in another section (Section 11104), except where Section 11108 specifies differently.
Except as otherwise provided in Section 11108, this division applies to funds transfers defined in Section 11104.
funds transfers Section 11104 Section 11108 financial transactions transfer rules division application exceptions defined transfers governing rules application scope
Section § 11103
This law section defines what a payment order is and explains the roles of different parties involved in such a transaction. A payment order is a sender's instruction to a receiving bank to transfer a specified amount of money to a beneficiary, and it must be unconditional except for the payment timing. It also covers terms like 'beneficiary,' 'beneficiary’s bank,' 'receiving bank,' and 'sender.' If an instruction involves multiple payments, each is considered a separate payment order. The payment order is officially issued once the receiver gets it.
(a)CA Commercial Law Code § 11103(a) In this division:
(1)CA Commercial Law Code § 11103(a)(1) “Payment order” means an instruction of a sender to a receiving bank, transmitted orally or in a record, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if all of the following apply:
(i)CA Commercial Law Code § 11103(a)(1)(i) The instruction does not state a condition to payment to the beneficiary other than time of payment.
(ii)CA Commercial Law Code § 11103(a)(1)(ii) The receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender.
(iii)CA Commercial Law Code § 11103(a)(1)(iii) The instruction is transmitted by the sender directly to the receiving bank or to an agent, funds-transfer system, or communication system for transmittal to the receiving bank.
(2)CA Commercial Law Code § 11103(a)(2) “Beneficiary” means the person to be paid by the beneficiary’s bank.
(3)CA Commercial Law Code § 11103(a)(3) “Beneficiary’s bank” means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account.
(4)CA Commercial Law Code § 11103(a)(4) “Receiving bank” means the bank to which the sender’s instruction is addressed.
(5)CA Commercial Law Code § 11103(a)(5) “Sender” means the person giving the instruction
to the receiving bank.
(b)CA Commercial Law Code § 11103(b) If an instruction complying with paragraph (1) of subdivision (a) is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment.
(c)CA Commercial Law Code § 11103(c) A payment order is issued when it is sent to the receiving bank.
payment order instruction sender receiving bank beneficiary beneficiary’s bank account reimbursement transmittal funds-transfer system
Section § 11104
This section defines key terms related to funds transfers. A 'funds transfer' is a sequence of transactions starting with an order to pay and ending when the beneficiary's bank accepts this order. An 'intermediary bank' is any bank involved in the transfer process aside from the sender's or recipient's bank. The 'originator' is the person or entity that starts the transfer. Lastly, the 'originator's bank' can either be the first bank to receive the payment order if the originator is not a bank or the originator itself if it is a bank.
In this division:
(a)CA Commercial Law Code § 11104(a) “Funds transfer” means the series of transactions, beginning with the originator’s payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator’s bank or an intermediary bank intended to carry out the originator’s payment order. A funds transfer is completed by acceptance by the beneficiary’s bank of a payment order for the benefit of the beneficiary of the originator’s payment order.
(b)CA Commercial Law Code § 11104(b) “Intermediary bank” means a receiving bank other than the originator’s bank or the beneficiary’s bank.
(c)CA Commercial Law Code § 11104(c) “Originator” means the sender of the first payment order in a funds transfer.
(d)CA Commercial Law Code § 11104(d) “Originator’s bank” means (i) the receiving bank to which the payment order of the originator is issued if the originator is not a bank, or (ii) the originator if the originator is a bank.
funds transfer payment order beneficiary's bank intermediary bank originator originator's bank receiver bank transaction sequence bank acceptance payment process
Section § 11105
This section explains key terms used in financial transactions involving banks. It defines what an 'authorized account' is, outlines who qualifies as a 'bank' or 'customer,' and describes what a 'funds-transfer business day' means. The section also covers what a 'funds-transfer system' entails and how to 'prove' something under legal standards. Additional definitions relevant to this division are listed, pointing to other sections where they can be found. It also mentions that other definitions and principles from related divisions apply here as well.
(a)CA Commercial Law Code § 11105(a) In this division:
(1)CA Commercial Law Code § 11105(a)(1) “Authorized account” means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.
(2)CA Commercial Law Code § 11105(a)(2) “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this division.
(3)CA Commercial Law Code § 11105(a)(3) “Customer” means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive
payment orders.
(4)CA Commercial Law Code § 11105(a)(4) “Funds-transfer business day” of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.
(5)CA Commercial Law Code § 11105(a)(5) “Funds-transfer system” means a wire transfer network, automated clearinghouse, or other communication system of a clearinghouse or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.
(6)CA Commercial Law Code § 11105(a)(6) [Reserved]
(7)CA Commercial Law Code § 11105(a)(7) “Prove” with respect to a fact means to meet the burden of establishing the fact under subdivision (8) of Section 1201.
(b)CA Commercial Law Code § 11105(b) Other definitions applying to this division and the sections in which they appear are:
Acceptance: Section 11209.
Beneficiary: Section 11103.
Beneficiary’s bank: Section 11103.
Executed: Section
11301.
Execution date: Section 11301.
Funds transfer: Section 11104.
Funds-transfer system rule: Section 11501.
Intermediary bank: Section 11104.
Originator: Section 11104.
Originator’s bank: Section 11104.
Payment by beneficiary’s bank to beneficiary: Section 11405.
Payment by originator to beneficiary: Section 11406.
Payment by sender to receiving bank: Section 11403.
Payment date: Section 11401.
Payment order: Section 11103.
Receiving bank: Section 11103.
Security procedure: Section 11201.
Sender: Section 11103.
(c)CA Commercial Law Code § 11105(c) The following definitions in Division 4 (commencing with Section 4101) apply to this division:
Clearinghouse: Section 4104.
Item: Section 4104.
Suspends payments: Section 4104.
(d)CA Commercial Law Code § 11105(d) In addition, Division 1 (commencing with Section 1101) contains general definitions and principles of construction and interpretation applicable throughout
this division.
authorized account funds-transfer business day funds-transfer system bank definition customer definition proof standard payment order clearinghouse security procedure originator beneficiary receiving bank intermediary bank automated clearinghouse wire transfer network
Section § 11106
This law section explains how and when a bank can consider a payment order or a change to it as being received. Banks can set specific deadlines during the business day for accepting these orders or changes. If an order or change comes in after these deadlines, the bank can treat it as being received on the next business day. Additionally, if a certain action is required on a day that isn’t a business day, the law treats the next business day as the action date.
(a)CA Commercial Law Code § 11106(a) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to receipt of a notice stated in Section 1202. A receiving bank may fix a cutoff time or times on a funds-transfer business day for the receipt and processing of payment orders and communications canceling or amending payment orders. Different cutoff times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cutoff time may apply to senders generally or different cutoff times may apply to different senders or categories of payment orders. If a payment order or communication canceling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cutoff time on a funds-transfer business
day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.
(b)CA Commercial Law Code § 11106(b) If this division refers to an execution date or payment date or states a day on which a receiving bank is required to take action, and the date or day does not fall on a funds-transfer business day, the next day that is a funds-transfer business day is treated as the date or day stated, unless the contrary is stated in this division.
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Section § 11107
If there's a conflict between this set of rules and the regulations set by the Federal Reserve, or the instructions they provide, those Federal rules take priority. Basically, the Federal guidelines will overrule any conflicting parts of these rules.
Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this division to the extent of the inconsistency.
Federal Reserve System Board of Governors Federal Reserve Banks operating circulars inconsistent provision supersede regulations priority conflict Federal guidelines Division rules
Section § 11108
This law explains which rules apply to money transfers. Generally, if a transfer is covered by the Electronic Fund Transfer Act (EFTA), State rules don't apply. However, if the transfer is a 'remittance transfer' but not considered an 'electronic fund transfer' under the EFTA, then State rules do apply. If there's ever a conflict between State rules and federal rules from the EFTA, the federal rules will take precedence.
(a)CA Commercial Law Code § 11108(a) Except as provided in subdivision (b), this division does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 (Title XX, Public Law 95-630, 92 Stat. 3728, 15 U.S.C. Sec. 1693 et seq.) as amended from time to time.
(b)CA Commercial Law Code § 11108(b) This division shall apply to a funds transfer that is a remittance transfer as defined in Section 1693o-1 of Title 15 of the United States Code, as amended from time to time, unless the remittance transfer is an electronic fund transfer as defined in Section 1693a of Title 15 of the United States Code, as amended from time to time.
(c)CA Commercial Law Code § 11108(c) In a funds
transfer pursuant to this division, if there is an inconsistency between the applicable provision of this division and the federal act, the applicable provisions of the federal act shall control to the extent of the inconsistency.
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