Bill Text: IA SF2170 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to stopping payment on a negotiable instrument by using an electronic record in lieu of a writing. (Formerly SSB 3054.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2018-03-13 - Withdrawn. S.J. 661. [SF2170 Detail]

Download: Iowa-2017-SF2170-Introduced.html

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Senate File 2170 - Introduced




                                 SENATE FILE       
                                 BY  COMMITTEE ON COMMERCE

                                 (SUCCESSOR TO SSB
                                     3054)

                                 (COMPANION TO HF 2171
                                     BY COMMITTEE ON
                                     COMMERCE)

                                      A BILL FOR

  1 An Act relating to stopping payment on a negotiable instrument
  2    by using an electronic record in lieu of a writing.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN



  1  1    Section 1.  Section 554.4403, Code 2018, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  2A.  In addition to a stop=payment order
  1  4 made or renewed in writing as described in subsection 2, an
  1  5 equivalent stop=payment order may also be made or renewed
  1  6 as part of a record that is stored in an electronic medium,
  1  7 and submitted to the bank, which may include delivery via
  1  8 electronic transmission.
  1  9                           EXPLANATION
  1 10 The inclusion of this explanation does not constitute agreement with
  1 11 the explanation's substance by the members of the general assembly.
  1 12    This bill amends a provision in Article 4, Part 4, of the
  1 13 uniform commercial code ("UCC") regulating the relationship
  1 14 between banks and its customers.
  1 15    Code section 554.4403 requires a customer or other
  1 16 authorized person to give the bank timely and adequate notice
  1 17 of stop=payment instructions (an "order") either verbally or in
  1 18 writing.  The order must be received by the bank in sufficient
  1 19 detail (describing the item or account) and within a reasonable
  1 20 time sufficient for it to act (some period between the time the
  1 21 item left the customer's possession and before it is presented
  1 22 to the bank for payment from the customer's account).  A verbal
  1 23 stop=payment order lapses 14 days after it was given.  A
  1 24 written stop=payment order lapses after six months following
  1 25 the date it was given.  During the period that a verbal or
  1 26 written stop=payment order is effective, it may be renewed for
  1 27 any number of additional six=month periods but only if the
  1 28 order is given in writing during the effectiveness of the last
  1 29 order given.
  1 30    The bill amends Code section 554.4403 by allowing a customer
  1 31 or other authorized person to contact the customer's bank by
  1 32 using an electronic "record" and submitting that record (e.g.,
  1 33 by electronic transmission such as email) to stop payment on an
  1 34 item on an equivalent basis to a written stop=payment order.
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