Bill Text: FL S0772 | 2024 | Regular Session | Introduced
Bill Title: Misdescription of Beneficiaries and Banks
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S0772 Detail]
Download: Florida-2024-S0772-Introduced.html
Florida Senate - 2024 SB 772 By Senator Rouson 16-00565A-24 2024772__ 1 A bill to be entitled 2 An act relating to misdescription of beneficiaries and 3 banks; amending s. 670.207, F.S.; revising 4 requirements for rights as a beneficiary of a payment 5 order and acceptance of the order when the beneficiary 6 is a nonexistent or unidentifiable person or account; 7 removing rules relating to accepted payment orders; 8 amending s. 670.208, F.S.; revising requirements 9 relating to the misdescription of banks for 10 intermediaries and beneficiaries; providing an 11 effective date. 12 13 Be It Enacted by the Legislature of the State of Florida: 14 15 Section 1. Section 670.207, Florida Statutes, is amended to 16 read: 17 670.207 Misdescription of beneficiary.— 18 (1)(a) Subject to subsection (2), if, in a payment order 19 received by the beneficiary’s bank, the name, bank account 20 number, or other identification of the beneficiary refers to a 21 nonexistent or unidentifiable person or account, no person has 22 rights as a beneficiary of the order and acceptance of the order 23 cannot occur. 24 (b)(2)IfA payment order received by the beneficiary’s 25 bank must identifyidentifiesthe beneficiary both by name and 26 by an identifying or bank account number. Ifandthe name and 27 number identify different persons, no person has rights as athe28following rules apply:29(a)Except as otherwise provided in subsection (3), if the30beneficiary’s bank does not know that the name and number refer31to different persons, it may rely on the number as the proper32identification of thebeneficiary of the order and acceptance of 33 the order cannot occur. 34 (2)(a) The beneficiary’s bank mustneed notdetermine in 35 good faith, and using reasonable care, whether the name and 36 number refer to the same person. The duty of reasonable care 37 must include, at a minimum, an automated system for name and 38 number match which escalates any transaction with any 39 discrepancy to a human reviewer. 40 (b) If the bank cannot reasonably verifybeneficiary’s bank41pays the person identified by name or knowsthat the name and 42 number refer to the same personidentify different persons, no43person has rights as beneficiary except the person paid by the44beneficiary’s bank if that person was entitled to receive45payment from the originator of the funds transfer. If no person46has rights as beneficiary, acceptance of the order cannot occur 47 until the bank has verified with the originator or the receiving 48 bank that the payment order should be processed and any 49 discrepancy is corrected. 50 (3) If a payment order described in subsection (2) is 51 accepted, the originator’s payment order described the 52 beneficiary inconsistently by name and number, and the 53 beneficiary’s bank pays any person whom the originator did not 54 intend to pay, then the originator is not obliged to pay its 55 order, unless the originator was grossly negligent in sending 56 the original instructions, and the beneficiary’s bank was 57 diligent in ascertaining whether the number and name referred to 58 the same person.the person identified by number as permitted by59paragraph (2)(a), the following rules apply:60(a)If the originator is a bank, the originator is obliged61to pay its order.62(b)If the originator is not a bank and proves that the63person identified by number was not entitled to receive payment64from the originator, the originator is not obliged to pay its65order unless the originator’s bank proves that the originator,66before acceptance of the originator’s order, had notice that67payment of a payment order issued by the originator might be68made by the beneficiary’s bank on the basis of an identifying or69bank account number even if it identifies a person different70from the named beneficiary. Proof of notice may be made by any71admissible evidence. The originator’s bank satisfies the burden72of proof if it proves that the originator, before the payment73order was accepted, signed a writing stating the information to74which the notice relates.75 (4)In a case governed by paragraph (2)(a),If the 76 beneficiary’s bank improperlyrightfullypays anytheperson 77identified by number and that person wasnot entitled or 78 intended to receive payment from the originator, the amount paid 79 may be recovered from that person to the extent allowed by the 80 law governing mistake and restitution.as follows:81(a)If the originator is obliged to pay its payment order 82 due to gross negligenceas stated in subsection (3), the 83 originator has the right to recover. Otherwise, the bank that 84 has borne the loss of the order has the right to recover. 85(b)If the originator is not a bank and is not obliged to86pay its payment order, the originator’s bank has the right to87recover.88 (5)(a) A bank accepting orders at a location in this state, 89 or from a customer who resides in this state, must comply with 90 this section. 91 (b) The bank shall enter into an agreement with any 92 counterparty bank requiring name identification as described in 93 this section and, if any beneficiary bank does not engage in 94 name identification and any loss occurs, the receiving bank 95 shall indemnify the originator. 96 Section 2. Section 670.208, Florida Statutes, is amended to 97 read: 98 670.208 Misdescription of intermediary bank or 99 beneficiary’s bank.— 100(1)This subsection applies to aAny payment order 101 identifying an intermediary bank or the beneficiary’s bank must 102 use bothonly byan identifying number and a name. 103(a)The receiving bank mustmay rely on the number as the104proper identification of the intermediary or beneficiary’s bank105and need notdetermine whether the number identifies a bank and 106 whether the bank identified by number matches the name provided. 107(b)The sender is obliged to compensate the receiving bank108for any loss and expenses incurred by the receiving bank as a109result of its reliance on the number in executing or attempting110to execute the order.111(2)This subsection applies to a payment order identifying112an intermediary bank or the beneficiary’s bank both by name and113an identifying number if the name and number identify different114persons.115(a)If the sender is a bank, the receiving bank may rely on116the number as the proper identification of the intermediary or117beneficiary’s bank if the receiving bank, when it executes the118sender’s order, does not know that the name and number identify119different persons. The receiving bank need not determine whether120the name and number refer to the same person or whether the121number refers to a bank. The sender is obliged to compensate the122receiving bank for any loss and expenses incurred by the123receiving bank as a result of its reliance on the number in124executing or attempting to execute the order.125(b)If the sender is not a bank and the receiving bank126proves that the sender, before the payment order was accepted,127had notice that the receiving bank might rely on the number as128the proper identification of the intermediary or beneficiary’s129bank even if it identifies a person different from the bank130identified by name, the rights and obligations of the sender and131the receiving bank are governed by paragraph (a), as though the132sender were a bank. Proof of notice may be made by any133admissible evidence. The receiving bank satisfies the burden of134proof if it proves that the sender, before the payment order was135accepted, signed a writing stating the information to which the136notice relates.137(c)Regardless of whether the sender is a bank, the138receiving bank may rely on the name as the proper identification139of the intermediary or beneficiary’s bank if the receiving bank,140at the time it executes the sender’s order, does not know that141the name and number identify different persons.The receiving 142 bank mustneed notdetermine whether the name and number refer 143 to the same intermediary or beneficiary bankperson. 144(d)If the receiving bank determinesknowsthat the name 145 and number identify different bankspersons, reliance on either 146 the name or the number in executing the sender’s payment order 147 is a breach of the obligation stated in s. 670.302(1)(a). 148 Section 3. This act shall take effect July 1, 2024.