AB 2858, as introduced, Chu. Bank deposits and collections.
Existing law requires a collecting bank, as defined, to exercise ordinary care when performing specific roles in a commercial banking transaction, and limits the liability of a collecting bank for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit, as specified.
This bill would make a nonsubstantive change to this provision.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 4202 of the Commercial Code is amended
2to read:
(a) A collecting bank shall exercise ordinary care in all
4of the following:
5(1) Presenting an item or sending it for presentment.
6(2) Sending notice of dishonor or nonpayment or returning an
7item other than a documentary draft to the bank’s transferor after
P2 1learning that the item has not been paid or accepted, as the case
2may be.
3(3) Settling for an item when the bank receives final settlement.
4(4) Notifying its transferor of any loss or delay in transit within
5a reasonable time after discovery thereof.
6(b) A collecting bank exercises ordinary care under subdivision
7(a) by taking proper action before its midnight deadline following
8receipt of an item, notice, or settlement. Taking proper action
9within a reasonably longer time may constitute the exercise of
10ordinary care, but the bank has the burden of establishing
11timeliness.
12(c) Subject to paragraph (1) of subdivision (a), a bankbegin delete is notend delete
13begin insert shall not beend insert liable for the insolvency, neglect, misconduct, mistake,
14or default of another bank or person or for loss or destruction of
15an item in the possession of others or in transit.
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