Code of the District of Columbia

§ 28:4A-105. Other definitions.

(a) In this article:

(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) “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 article.

(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) “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) “Funds-transfer system” means a wire transfer network, automated clearing house, or other communication system of a clearing house 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(6) Repealed.

(7) “Prove” with respect to a fact means to meet the burden of establishing the fact under § 28:1-201(b)(8).

(b) Other definitions applying to this article and the sections in which they appear are:

“Acceptance”. § 28:4A-209

“Beneficiary”. § 28:4A-103

“Beneficiary’s bank”. § 28:4A-103

“Executed”. § 28:4A-301

“Execution date”. § 28:4A-301

“Funds transfer”. § 28:4A-104

“Funds-transfer system rule”. § 28:4A-501

“Intermediary bank”. § 28:4A-104

“Originator”. § 28:4A-104

“Originator’s bank”. § 28:4A-104

“Payment by beneficiary’s bank to beneficiary”. § 28:4A-405

“Payment by originator to beneficiary”. § 28:4A-406

“Payment by sender to receiving bank”. § 28:4A-403

“Payment date”. § 28:4A-401

“Payment order”. § 28:4A-103

“Receiving bank”. § 28:4A-103

“Security procedure”. § 28:4A-201

“Sender”. § 28:4A-103

The following definitions in Article 4 apply to this article:

“Clearing house”. § 28:4-104

“Item”. § 28:4-104

“Suspends payments”. § 28:4-104

In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.

(Apr. 30, 1992, D.C. Law 9-95, § 2(c), 39 DCR 1595; Apr. 27, 2013, D.C. Law 19-299, § 7(a), 60 DCR 2634.)

Prior Codifications

1981 Ed., § 28:4A-105.

Effect of Amendments

The 2013 amendment by D.C. Law 19-299 repealed (a)(6), which read: “ ‘Good faith’ means honesty in fact and the observance of reasonable commercial standards of fair dealing”; and substituted “under § 28:1-201(b)(8)” for “(§ 28:1-201(8))” in (a)(7).

Uniform Commercial Code Comment

1. The definition of “bank” in subsection (a)(2) includes some institutions that are not commercial banks. The definition reflects the fact that many financial institutions now perform functions previously restricted to commercial banks, including acting on behalf of customers in funds transfers. Since many funds transfers involve payment orders to or from foreign countries the definition also covers foreign banks. The definition also includes Federal Reserve Banks. Funds transfers carried out by Federal Reserve Banks are described in Comments 1 and 2 to Section 4A-107.

2. Funds transfer business is frequently transacted by banks outside of general banking hours. Thus, the definition of banking day in Section 4-104(1)(c) cannot be used to describe when a bank is open for funds transfer business. Subsection (a)(4) defines a new term, “funds transfer business day,” which is applicable to Article 4A. The definition states, “is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.“ In some cases it is possible to electronically transmit payment orders and other communications to a receiving bank at any time. If the receiving bank is not open for the processing of an order when it is received, the communication is stored in the receiving bank’s computer for retrieval when the receiving bank is open for processing. The use of the conjunctive makes clear that the defined term is limited to the period during which all functions of the receiving bank can be performed, i.e., receipt, processing, and transmittal of payment orders, cancellations and amendments.

3. Subsection (a)(5) defines “funds transfer system.” The term includes a system such as CHIPS which provides for transmission of a payment order as well as settlement of the obligation of the sender to pay the order. It also includes automated clearing houses, operated by a clearing house or other association of banks, which process and transmit payment orders of banks to other banks. In addition the term includes organizations that provide only transmission services such as SWIFT. The definition also includes the wire transfer network and automated clearing houses of Federal Reserve Banks. Systems of the Federal Reserve Banks, however, are treated differently from systems of other associations of banks. Funds transfer systems other than systems of the Federal Reserve Banks are treated in Article 4A as a means of communication of payment orders between participating banks. Section 4A-206. The Comment to that section and the Comment to Section 4A-107 explain how Federal Reserve Banks function under Article 4A.

Funds transfer systems are also able to promulgate rules binding on participating banks that, under Section 4A-501, may supplement or in some cases may even override provisions of Article 4A.

4. Subsection (d) incorporates definitions stated in Article 1 as well as principles of construction and interpretation stated in that Article. Included is Section 1-103. The last paragraph of the Comment to Section 4A-102 is addressed to the issue of the extent to which general principles of law and equity should apply to situations covered by provisions of Article 4A.