Bill Text: CA AB2858 | 2015-2016 | Regular Session | Introduced

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Bill Title: Bank deposits and collections.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-11-30 - Died at Desk. [AB2858 Detail]

Download: California-2015-AB2858-Introduced.html

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BILL NUMBER: AB 2858	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Chu

                        FEBRUARY 19, 2016

   An act to amend Section 4202 of the Commercial Code, relating to
commercial transactions.


	LEGISLATIVE COUNSEL'S DIGEST


   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 1.  Section 4202 of the Commercial Code is amended to read:

   4202.  (a) A collecting bank shall exercise ordinary care in all
of the following:
   (1) Presenting an item or sending it for presentment.
   (2) Sending notice of dishonor or nonpayment or returning an item
other than a documentary draft to the bank's transferor after
learning that the item has not been paid or accepted, as the case may
be.
   (3) Settling for an item when the bank receives final settlement.
   (4) Notifying its transferor of any loss or delay in transit
within a reasonable time after discovery thereof.
   (b) A collecting bank exercises ordinary care under subdivision
(a) by taking proper action before its midnight deadline following
receipt of an item, notice, or settlement. Taking proper action
within a reasonably longer time may constitute the exercise of
ordinary care, but the bank has the burden of establishing
timeliness.
   (c) Subject to paragraph (1) of subdivision (a), a bank 
is not   shall not be  liable 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.