Texas Business & Commerce Code - Section 4A.403. Payment By Sender To Receiving Bank
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§ 4A.403. PAYMENT BY SENDER TO RECEIVING BANK. (a)
Payment of the sender's obligation under Section 4A.402 to pay the
receiving bank occurs as follows:
(1) If the sender is a bank, payment occurs when the
receiving bank receives final settlement of the obligation through
a Federal Reserve Bank or through a funds transfer system.
(2) If the sender is a bank and the sender (i) credited
an account of the receiving bank with the sender, or (ii) caused an
account of the receiving bank in another bank to be credited,
payment occurs when the credit is withdrawn or, if not withdrawn, at
midnight of the day on which the credit is withdrawable and the
receiving bank learns of that fact.
(3) If the receiving bank debits an account of the
sender with the receiving bank, payment occurs when the debit is
made to the extent the debit is covered by a withdrawable credit
balance in the account.
(b) If the sender and receiving bank are members of a funds
transfer system that nets obligations multilaterally among
participants, the receiving bank receives final settlement when
settlement is complete in accordance with the rules of the system.
The obligation of the sender to pay the amount of a payment order
transmitted through the funds transfer system may be satisfied, to
the extent permitted by the rules of the system, by setting off and
applying against the sender's obligation the right of the sender to
receive payment from the receiving bank of the amount of any other
payment order transmitted to the sender by the receiving bank
through the funds transfer system. The aggregate balance of
obligations owed by each sender to each receiving bank in the funds
transfer system may be satisfied, to the extent permitted by the
rules of the system, by setting off and applying against that
balance the aggregate balance of obligations owed to the sender by
other members of the system. The aggregate balance is determined
after the right of setoff stated in the second sentence of this
subsection has been exercised.
(c) If two banks transmit payment orders to each other under
an agreement that settlement of the obligations of each bank to the
other under Section 4A.402 will be made at the end of the day or
other period, the total amount owed with respect to all orders
transmitted by one bank shall be set off against the total amount
owed with respect to all orders transmitted by the other bank. To
the extent of the setoff, each bank has made payment to the other.
(d) In a case not covered by Subsection (a), the time when
payment of the sender's obligation under Section 4A.402(b) or (c)
occurs is governed by applicable principles of law that determine
when an obligation is satisfied.
Added by Acts 1993, 73rd Leg., ch. 570, § 7, eff. Sept. 1, 1993.
Section: 4A.301 4A.302 4A.303 4A.304 4A.305 4A.401 4A.402 4A.403 4A.404 4A.405 4A.406 4A.501 4A.502 4A.503 4A.504
Last modified: August 10, 2007
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