Illinois Compiled Statutes
810 ILCS 5/ - Uniform Commercial Code.
Article 4A - Funds Transfers

(810 ILCS 5/Art. 4A heading)

 
(810 ILCS 5/Art. 4A Pt. 1 heading)

 
(810 ILCS 5/4A-101) (from Ch. 26, par. 4A-101)
Sec. 4A-101.
Short title.
This Article may be cited as Uniform
Commercial Code-Funds Transfers.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-102) (from Ch. 26, par. 4A-102)
Sec. 4A-102.
Subject matter.
Except as otherwise provided in Section
4A-108, this Article applies to funds transfers defined in Section 4A-104.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-103) (from Ch. 26, par. 4A-103)
Sec. 4A-103.
Payment order; definitions.
(a) In this Article:
(b) If an instruction complying with subsection (a)(1) is to make more
than one payment to a beneficiary, the instruction is a separate payment
order with respect to each payment.
(c) A payment order is issued when it is sent to the receiving bank.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-104) (from Ch. 26, par. 4A-104)
Sec. 4A-104.
Funds transfer; definitions.
In this Article:
(a) "Funds transfer" means the series of transactions, beginning with
the originator's payment order, made for the purpose of making payment to
the beneficiary of the order. The term includes any payment order issued
by the originator's bank or an intermediary bank intended to carry out the
originator's payment order. A funds transfer is completed by acceptance by
the beneficiary's bank of a payment order for the benefit of the
beneficiary of the originator's payment order.
(b) "Intermediary bank" means a receiving bank other than the
originator's bank or the beneficiary's bank.
(c) "Originator" means the sender of the first payment order in a
funds transfer.
(d) "Originator's bank" means (i) the receiving bank to which the
payment order of the originator is issued if the originator is not a bank,
or (ii) the originator if the originator is a bank.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-105) (from Ch. 26, par. 4A-105)
Sec. 4A-105. Other definitions.
(a) In this Article:
(b) Other definitions applying to this Article and the Sections in which
they appear are:


(c) The following definitions in Article 4 apply to this Article:

(d) In addition, Article 1 contains general definitions and principles of
construction and interpretation applicable throughout this Article.

(Source: P.A. 95-895, eff. 1-1-09.)
 
(810 ILCS 5/4A-106) (from Ch. 26, par. 4A-106)
Sec. 4A-106. Time payment order is received.
(a) The time of receipt of a payment order or communication cancelling
or amending a payment order is determined by the rules applicable to
receipt of a notice stated in Section 1-202. A receiving bank may fix
a cut-off time or times on a funds transfer business day for the receipt
and processing of payment orders and communications cancelling or amending
payment orders. Different cut-off times may apply to payment orders,
cancellations, or amendments, or to different categories of payment orders,
cancellations, or amendments. A cut-off time may apply to senders
generally or different cut-off times may apply to different senders or
categories of payment orders. If a payment order or communication
cancelling or amending a payment order is received after the close of a
funds transfer business day or after the appropriate cut-off time on a
funds transfer business day, the receiving bank may treat the payment
order or communication as received at the opening of the next funds
transfer business day.
(b) If this Article refers to an execution date or payment date or
states a day on which a receiving bank is required to take action, and the
date or day does not fall on a funds transfer business day, the next day
that is a funds transfer business day is treated as the date or day stated,
unless the contrary is stated in this Article.

(Source: P.A. 95-895, eff. 1-1-09.)
 
(810 ILCS 5/4A-107) (from Ch. 26, par. 4A-107)
Sec. 4A-107.
Federal Reserve regulations and operating circulars.
Regulations of the Board of Governors of the Federal Reserve System and
operating circulars of the Federal Reserve Banks supersede any inconsistent
provision of this Article to the extent of the inconsistency.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-108) (from Ch. 26, par. 4A-108)
Sec. 4A-108. Exclusion of consumer transactions governed by federal
law.
(a) Except as provided in subsection (b), this Article does not apply to a funds transfer any part
of which is governed by the Electronic Fund Transfer Act of 1978 (Title XX,
Public Law 95-630, 92 Stat. 3728, 15 U.S.C. Section 1693 et seq.) as
amended from time to time.
(b) This Article applies to a funds transfer that is a remittance transfer as defined in the Electronic Fund Transfer Act (15 U.S.C. Sec. 1693o-1), as amended from time to time, unless the remittance transfer is an electronic fund transfer as defined in the Electronic Fund Transfer Act (15 U.S.C. Sec. 1693a), as amended from time to time.
(c) In a funds transfer to which this Article applies, in the event of an inconsistency between an applicable provision of this Article and an applicable provision of the Electronic Fund Transfer Act, the provision of the Electronic Fund Transfer Act governs to the extent of the inconsistency.
(Source: P.A. 98-498, eff. 1-1-14.)
 
(810 ILCS 5/Art. 4A Pt. 2 heading)

 
(810 ILCS 5/4A-201) (from Ch. 26, par. 4A-201)
Sec. 4A-201.
Security procedure.
"Security procedure" means a
procedure established by agreement of a customer and a receiving bank for
the purpose of (i) verifying that a payment order or communication amending
or cancelling a payment order is that of the customer, or (ii) detecting
error in the transmission or the content of the payment order or
communication. A security procedure may require the use of algorithms or
other codes, identifying words or numbers, encryption, callback procedures,
or similar security devices. Comparison of a signature on a payment order
or communication with an authorized specimen signature of the customer is
not by itself a security procedure.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-202) (from Ch. 26, par. 4A-202)
Sec. 4A-202.
Authorized and verified payment orders.
(a) A payment order received by the receiving bank is
the authorized order of the person identified as sender if that person
authorized the order or is otherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that the authenticity of
payment orders issued to the bank in the name of the customer as sender
will be verified pursuant to a security procedure, a payment order received
by the receiving bank is effective as the order of the customer, whether or
not authorized, if (i) the security procedure is a commercially reasonable
method of providing security against unauthorized payment orders, and (ii)
the bank proves that it accepted the payment order in good faith and in
compliance with the security procedure and any written agreement or
instruction of the customer restricting acceptance of payment orders issued
in the name of the customer. The bank is not required to follow an
instruction that violates a written agreement with the customer or notice
of which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is a question of
law to be determined by considering the wishes of the customer expressed to
the bank, the circumstances of the customer known to the bank, including
the size, type, and frequency of payment orders normally issued by the
customer to the bank, alternative security procedures offered to the
customer, and security procedures in general use by customers and receiving
banks similarly situated. A security procedure is deemed to be
commercially reasonable if (i) the security procedure was chosen by the
customer after the bank offered, and the customer refused, a security
procedure that was commercially reasonable for that customer, and (ii) the
customer expressly agreed in writing to be bound by any payment order,
whether or not authorized, issued in its name and accepted by the bank in
compliance with the security procedure chosen by the customer.
(d) The term "sender" in this Article includes the customer in whose
name a payment order is issued if the order is the authorized order of the
customer under subsection (a), or it is effective as the order of the
customer under subsection (b).
(e) This Section applies to amendments and cancellations of payment
orders to the same extent it applies to payment orders.
(f) Except as provided in this Section and in Section 4A-203(a)(1),
rights and obligations arising under this Section or Section 4A-203 may not
be varied by agreement.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-203) (from Ch. 26, par. 4A-203)
Sec. 4A-203.
Unenforceability of certain verified payment orders.
(a) If an accepted payment order is not, under Section
4A-202(a), an authorized order of a customer identified as sender, but is
effective as an order of the customer pursuant to Section 4A-202(b), the
following rules apply:
(b) This Section applies to amendments of payment orders to the same
extent it applies to payment orders.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-204) (from Ch. 26, par. 4A-204)
Sec. 4A-204. Refund of payment and duty of customer to report with
respect to an unauthorized payment order.
(a) If a receiving bank accepts a payment order issued
in the name of its customer as sender which is (i) not authorized and not
effective as the order of the customer under Section 4A-202, or (ii) not
enforceable, in whole or in part, against the customer under Section
4A-203, the bank shall refund any payment of the payment order received
from the customer to the extent the bank is not entitled to enforce payment
and shall pay interest on the refundable amount calculated from the date
the bank received payment to the date of the refund. However, the customer
is not entitled to interest from the bank on the amount to be refunded if
the customer fails to exercise ordinary care to determine that the order
was not authorized by the customer and to notify the bank of the relevant
facts within a reasonable time not exceeding 90 days after the date the
customer received notification from the bank that the order was accepted or
that the customer's account was debited with respect to the order. The
bank is not entitled to any recovery from the customer on account of a
failure by the customer to give notification as stated in this Section.
(b) Reasonable time under subsection (a) may be fixed by agreement as
stated in Section 1-302(b), but the obligation of a receiving bank to
refund payment as stated in subsection (a) may not otherwise be varied
by agreement.

(Source: P.A. 95-895, eff. 1-1-09.)
 
(810 ILCS 5/4A-205) (from Ch. 26, par. 4A-205)
Sec. 4A-205.
Erroneous payment orders.
(a) If an accepted payment order was transmitted pursuant to a security
procedure for the detection of error and the payment order (i) erroneously
instructed payment to a beneficiary not intended by the sender, (ii)
erroneously instructed payment in an amount greater than the amount
intended by the sender, or (iii) was an erroneously transmitted duplicate
of a payment order previously sent by the sender, the following rules apply:
(b) If (i) the sender of an erroneous payment order described in
subsection (a) is not obliged to pay all or part of the order, and (ii) the
sender receives notification from the receiving bank that the order was
accepted by the bank or that the sender's account was debited with respect
to the order, the sender has a duty to exercise ordinary care, on the basis
of information available to the sender, to discover the error with respect
to the order and to advise the bank of the relevant facts within a
reasonable time, not exceeding 90 days, after the bank's notification was
received by the sender. If the bank proves that the sender failed to
perform that duty, the sender is liable to the bank for the loss the bank
proves it incurred as a result of the failure, but the liability of the
sender may not exceed the amount of the sender's order.
(c) This Section applies to amendments to payment orders to the same
extent it applies to payment orders.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-206) (from Ch. 26, par. 4A-206)
Sec. 4A-206.

Transmission of payment order through funds transfer or
other communication system.
(a) If a payment order addressed to a receiving bank is
transmitted to a funds transfer system or other third-party communication
system for transmittal to the bank, the system is deemed to be an agent of
the sender for the purpose of transmitting the payment order to the bank.
If there is a discrepancy between the terms of the payment order transmitted
to the system and the terms of the payment order transmitted by the system
to the bank, the terms of the payment order of the sender are those
transmitted by the system. This Section does not apply to a funds transfer
system of the Federal Reserve Banks.
(b) This Section applies to cancellations and amendments of payment
orders to the same extent it applies to payment orders.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-207) (from Ch. 26, par. 4A-207)
Sec. 4A-207.
Misdescription of beneficiary.
(a) Subject to subsection (b), if, in a payment order
received by the beneficiary's bank, the name, bank
account number, or other identification of the beneficiary refers to a
nonexistent or unidentifiable person or account, no person has rights as a
beneficiary of the order and acceptance of the order cannot occur.
(b) If a payment order received by the beneficiary's bank identifies the
beneficiary both by name and by an identifying or bank account number and
the name and number identify different persons, the following rules apply:
(c) If (i) a payment order described in subsection (b) is accepted, (ii)
the originator's payment order described the beneficiary inconsistently by
name and number, and (iii) the beneficiary's bank pays the person
identified by number as permitted by subsection (b)(1), the following
rules apply:
(d) In a case governed by subsection (b)(1), if the beneficiary's bank
rightfully pays the person identified by number and that person was not
entitled to receive payment from the originator, the amount paid may be
recovered from that person to the extent allowed by the law governing
mistake and restitution as follows:
(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-208) (from Ch. 26, par. 4A-208)
Sec. 4A-208.
Misdescription of intermediary bank or beneficiary's bank.
(a) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary's bank only by an identifying number.
(b) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary's bank both by name and an identifying
number if the name and number identify different persons.
(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-209) (from Ch. 26, par. 4A-209)
Sec. 4A-209.
Acceptance of payment order.
(a) Subject to subsection (d), a receiving bank other than the
beneficiary's bank accepts a payment order when it executes the order.
(b) Subject to subsections (c) and (d), a beneficiary's bank accepts a
payment order at the earliest of the following times:
(c) Acceptance of a payment order cannot occur before the order is
received by the receiving bank. Acceptance does not occur under subsection
(b)(2) or (b)(3) if the beneficiary of the payment order does not have an
account with the receiving bank, the account has been closed, or the
receiving bank is not permitted by law to receive credits for the
beneficiary's account.
(d) A payment order issued to the originator's bank cannot be accepted
until the payment date if the bank is the beneficiary's bank, or the
execution date if the bank is not the beneficiary's bank. If the
originator's bank executes the originator's payment order before the
execution date or pays the beneficiary of the originator's payment order
before the payment date and the payment order is subsequently canceled
pursuant to Section 4A-211(b), the bank may recover from the beneficiary
any payment received to the extent allowed by the law governing mistake
and restitution.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-210) (from Ch. 26, par. 4A-210)
Sec. 4A-210.
Rejection of payment order.
(a) A payment order is rejected by the receiving bank by a notice of
rejection transmitted to the sender orally, electronically, or in writing.
A notice of rejection need not use any particular words and is sufficient
if it indicates that the receiving bank is rejecting the order or will not
execute or pay the order. Rejection is effective when the notice is given
if transmission is by a means that is reasonable in the circumstances. If
notice of rejection is given by a means that is not reasonable, rejection
is effective when the notice is received. If an agreement of the sender and
receiving bank establishes the means to be used to reject a payment order,
(i) any means complying with the agreement is reasonable and (ii) any means
not complying is not reasonable unless no significant delay in receipt of
the notice resulted from the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the
beneficiary's bank fails to execute a payment order despite the existence
on the execution date of a withdrawable credit balance in an authorized
account of the sender sufficient to cover the order. If the sender does not
receive notice of rejection of the order on the execution date and the
authorized account of the sender does not bear interest, the bank is
obliged to pay interest to the sender on the amount of the order for the
number of days elapsing after the execution date to the earlier of the day
the order is canceled pursuant to Section 4A-211(d) or the day the sender
receives notice or learns that the order was not executed, counting the
final day of the period as an elapsed day. If the withdrawable credit
balance during that period falls below the amount of the order, the amount
of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment orders
issued to it are deemed rejected at the time the bank suspends payments.
(d) Acceptance of a payment order precludes a later rejection of the
order. Rejection of a payment order precludes a later acceptance of the order.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-211) (from Ch. 26, par. 4A-211)
Sec. 4A-211. Cancellation and amendment of payment order.
(a) A communication of the sender of a payment order cancelling or
amending the order may be transmitted to the receiving bank orally,
electronically, or in writing. If a security procedure is in effect between
the sender and the receiving bank, the communication is not effective to
cancel or amend the order unless the communication is verified pursuant to
the security procedure or the bank agrees to the cancellation or amendment.
(b) Subject to subsection (a), a communication by the sender cancelling
or amending a payment order is effective to cancel or amend the order if
notice of the communication is received at a time and in a manner affording
the receiving bank a reasonable opportunity to act on the communication
before the bank accepts the payment order.
(c) After a payment order has been accepted, cancellation or amendment
of the order is not effective unless the receiving bank agrees or a
funds transfer system rule allows cancellation or amendment without
agreement of the bank.
(d) An unaccepted payment order is canceled by operation of law at the
close of the fifth funds transfer business day of the receiving bank after
the execution date or payment date of the order.
(e) A canceled payment order cannot be accepted. If an accepted payment
order is canceled, the acceptance is nullified and no person has any right
or obligation based on the acceptance. Amendment of a payment order is
deemed to be cancellation of the original order at the time of amendment
and issue of a new payment order in the amended form at the same time.
(f) Unless otherwise provided in an agreement of the parties or in a
funds transfer system rule, if the receiving bank, after accepting a
payment order, agrees to cancellation or amendment of the order by the
sender or is bound by a funds transfer system rule allowing cancellation or
amendment without the bank's agreement, the sender, whether or not
cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney's fees, incurred by the bank as
a result of the cancellation or amendment or attempted cancellation or
amendment.
(g) A payment order is not revoked by the death or legal incapacity of
the sender unless the receiving bank knows of the death or of an
adjudication of incapacity by a court of competent jurisdiction and has
reasonable opportunity to act before acceptance of the order.
(h) A funds transfer system rule is not effective to the extent it
conflicts with subsection (c)(2).

(Source: P.A. 97-813, eff. 7-13-12.)
 
(810 ILCS 5/4A-212) (from Ch. 26, par. 4A-212)
Sec. 4A-212.

Liability and duty of receiving bank regarding unaccepted
payment order. If a receiving bank fails to accept a payment order that it
is obliged by express agreement to accept, the bank is liable for breach of
the agreement to the extent provided in the agreement or in this Article,
but does not otherwise have any duty to accept a payment order or, before
acceptance, to take any action, or refrain from taking action, with respect
to the order except as provided in this Article or by express agreement.
Liability based on acceptance arises only when acceptance occurs as stated
in Section 4A-209, and liability is limited to that provided in this
Article. A receiving bank is not the agent of the sender or beneficiary of
the payment order it accepts, or of any other party to the funds transfer,
and the bank owes no duty to any party to the funds transfer except as
provided in this Article or by express agreement.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/Art. 4A Pt. 3 heading)

 
(810 ILCS 5/4A-301) (from Ch. 26, par. 4A-301)
Sec. 4A-301.
Execution and execution date.
(a) A payment order is "executed" by the receiving bank
when it issues a payment order intended to carry out the payment order
received by the bank. A payment order received by the beneficiary's bank
can be accepted but cannot be executed.
(b) "Execution date" of a payment order means the day on which the
receiving bank may properly issue a payment order in execution of the
sender's order. The execution date may be determined by instruction of the
sender but cannot be earlier than the day the order is received and, unless
otherwise determined, is the day the order is received. If the sender's
instruction states a payment date, the execution date is the payment date
or an earlier date on which the execution is reasonably necessary to
allow payment to the beneficiary on the payment date.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-302) (from Ch. 26, par. 4A-302)
Sec. 4A-302.
Obligations of receiving bank in execution of payment order.
(a) Except as provided in subsections (b) through (d), if
the receiving bank accepts a payment order pursuant to Section 4A-209(a),
the bank has the following obligations in executing the order:
(b) Unless otherwise instructed, a receiving bank executing a payment
order may (i) use any funds transfer system if use of
that system is reasonable in the circumstances, and (ii) issue a payment
order to the beneficiary's bank or to an intermediary bank through which a
payment order conforming to the sender's order can expeditiously be issued
to the beneficiary's bank if the receiving bank exercises ordinary care in
the selection of the intermediary bank. A receiving bank is not required
to follow an instruction of the sender designating a funds transfer system
to be used in carrying out the funds transfer if the receiving bank, in
good faith, determines that it is not feasible to follow the instruction or
that following the instruction would unduly delay completion of the funds transfer.
(c) Unless subsection (a)(2) applies or the receiving bank is otherwise
instructed, the bank may execute a payment order by transmitting its
payment order by first class mail or by any means reasonable in the
circumstances. If the receiving bank is instructed to execute the sender's
order by transmitting its payment order by a particular means, the receiving
bank may issue its payment order by the means stated or by any means as
expeditious as the means stated.
(d) Unless instructed by the sender, (i) the receiving bank may not
obtain payment of its charges for services and expenses in connection with
the execution of the sender's order by issuing a payment order in an amount
equal to the amount of the sender's order less the amount of the charges,
and (ii) may not instruct a subsequent receiving bank to obtain payment of
its charges in the same manner.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-303) (from Ch. 26, par. 4A-303)
Sec. 4A-303.
Erroneous execution of payment order.
(a) A receiving bank that (i) executes the payment order
of the sender by issuing a payment order in an amount greater than the
amount of the sender's order, or (ii) issues a payment order in execution
of the sender's order and then issues a duplicate order, is entitled to
payment of the amount of the sender's order under Section 4A-402(c) if that
subsection is otherwise satisfied. The bank is entitled to recover from the
beneficiary of the erroneous order the excess payment received to the
extent allowed by the law governing mistake and restitution.
(b) A receiving bank that executes the payment order of the sender by
issuing a payment order in an amount less than the amount of the sender's
order is entitled to payment of the amount of the sender's order under
Section 4A-402(c) if (i) that subsection is otherwise satisfied and (ii)
the bank corrects its mistake by issuing an additional payment order for
the benefit of the beneficiary of the sender's order. If the error is not
corrected, the issuer of the erroneous order is entitled to receive or
retain payment from the sender of the order it accepted only to the extent
of the amount of the erroneous order. This subsection does not apply if
the receiving bank executes the sender's payment order by issuing a payment
order in an amount less than the amount of the sender's order
for the purpose of obtaining payment of its charges for services and
expenses pursuant to the instruction of the sender.
(c) If a receiving bank executes the payment order of the sender by
issuing a payment order to a beneficiary different from the beneficiary of
the sender's order and the funds transfer is completed on the basis of that
error, the sender of the payment order that was erroneously executed and
all previous senders in the funds transfer are not obliged to pay the
payment orders they issued. The issuer of the erroneous order is entitled
to recover from the beneficiary of the order the payment received to the
extent allowed by the law governing mistake and restitution.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-304) (from Ch. 26, par. 4A-304)
Sec. 4A-304.
Duty of sender to report erroneously executed payment order.
If the sender of a payment order that is erroneously executed as stated
in Section 4A-303 receives notification from the receiving bank that the
order was executed or that the sender's account was debited with
respect to the order, the sender has a duty to exercise ordinary care to
determine, on the basis of information available to the sender, that the
order was erroneously executed and to notify the bank of the relevant facts
within a reasonable time not exceeding 90 days after the notification from
the bank was received by the sender. If the sender fails to perform that
duty, the bank is not obliged to pay interest on any amount refundable to
the sender under Section 4A-402(d) for the period before the bank learns of
the execution error. The bank is not entitled to any recovery from the
sender on account of a failure by the sender to perform the duty stated
in this Section.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-305) (from Ch. 26, par. 4A-305)
Sec. 4A-305.

Liability for late or improper execution or failure to
execute payment order.
(a) If a funds transfer is completed but execution of a payment order by
the receiving bank in breach of Section 4A-302 results in delay in payment
to the beneficiary, the bank is obliged to pay interest to either the
originator or the beneficiary of the funds transfer for the period of delay
caused by the improper execution. Except as provided in subsection (c),
additional damages are not recoverable.
(b) If execution of a payment order by a receiving bank in breach of
Section 4A-302 results in (i) noncompletion of the funds transfer, (ii)
failure to use an intermediary bank designated by the originator, or (iii)
issuance of a payment order that does not comply with the terms of the
payment order of the originator, the bank is liable to the originator for
its expenses in the funds transfer and for incidental expenses and interest
losses, to the extent not covered by subsection (a), resulting from the
improper execution. Except as provided in subsection (c), additional
damages are not recoverable.
(c) In addition to the amounts payable under subsections (a) and (b),
damages, including consequential damages, are recoverable to the extent
provided in an express written agreement of the receiving bank.
(d) If a receiving bank fails to execute a payment order it was obliged
by express agreement to execute, the receiving bank is liable to the sender
for its expenses in the transaction and for incidental expenses and
interest losses resulting from the failure to execute. Additional damages,
including consequential damages, are recoverable to the extent provided in
an express written agreement of the receiving bank, but are not
otherwise recoverable.
(e) Reasonable attorney's fees are recoverable if demand for
compensation under subsection (a) or (b) is made and refused before an
action is brought on the claim. If a claim is made for breach of an
agreement under subsection (d) and the agreement does not provide for
damages, reasonable attorney's fees are recoverable if demand for
compensation under subsection (d) is made and refused before an action is
brought on the claim.
(f) Except as stated in this Section, the liability of a receiving bank
under subsections (a) and (b) may not be varied by agreement.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/Art. 4A Pt. 4 heading)

 
(810 ILCS 5/4A-401) (from Ch. 26, par. 4A-401)
Sec. 4A-401.
Payment date.
"Payment date" of a payment order means the
day on which the amount of the order is payable to the beneficiary by the
beneficiary's bank. The payment date may be determined by instruction of
the sender but cannot be earlier than the day the order is received by the
beneficiary's bank and, unless otherwise determined, is the day the order
is received by the beneficiary's bank.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-402) (from Ch. 26, par. 4A-402)
Sec. 4A-402.
Obligation of sender to pay receiving bank.
(a) This Section is subject to Sections 4A-205 and 4A-207.
(b) With respect to a payment order issued to the beneficiary's bank,
acceptance of the order by the bank obliges the sender to pay the bank the
amount of the order, but payment is not due until the payment date of
the order.
(c) This subsection is subject to subsection (e) and to Section 4A-303.
With respect to a payment order issued to a receiving bank other than the
beneficiary's bank, acceptance of the order by the receiving bank obliges
the sender to pay the bank the amount of the sender's order. Payment by the
sender is not due until the execution date of the sender's order. The
obligation of that sender to pay its payment order is excused if the funds
transfer is not completed by acceptance by the beneficiary's bank of a
payment order instructing payment to the beneficiary of that sender's
payment order.
(d) If the sender of a payment order pays the order and was not obliged
to pay all or part of the amount paid, the bank receiving payment is
obliged to refund payment to the extent the sender was not obliged to pay.
Except as provided in Sections 4A-204 and 4A-304, interest is payable on
the refundable amount from the date of payment.
(e) If a funds transfer is not completed as stated in subsection (c) and
an intermediary bank is obliged to refund payment as stated in subsection
(d) but is unable to do so because not permitted by applicable law or
because the bank suspends payments, a sender in the funds transfer that
executed a payment order in compliance with an instruction, as stated in
Section 4A-302(a)(1), to route the funds transfer through that intermediary
bank is entitled to receive or retain payment from the sender of the
payment order that it accepted. The first sender in the funds transfer that
issued an instruction requiring routing through that intermediary bank is
subrogated to the right of the bank that paid the intermediary bank to
refund as stated in subsection (d).
(f) The right of the sender of a payment order to be excused from the
obligation to pay the order as stated in subsection (c) or to receive
refund under subsection (d) may not be varied by agreement.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-403) (from Ch. 26, par. 4A-403)
Sec. 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:
(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 2 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 4A-402(c) occurs is
governed by applicable principles of law that determine when an obligation
is satisfied.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-404) (from Ch. 26, par. 4A-404)
Sec. 4A-404.

Obligation of beneficiary's bank to pay and give notice
to beneficiary.
(a) Subject to Sections 4A-211(e), 4A-405(d), and
4A-405(e), if a beneficiary's bank accepts a payment order, the bank is
obliged to pay the amount of the order to the beneficiary of the order.
Payment is due on the payment date of the order, but if acceptance occurs
on the payment date after the close of the funds transfer business day of
the bank, payment is due on the next funds transfer business day. If the
bank refuses to pay after demand by the beneficiary and receipt of notice
of particular circumstances that will give rise to consequential damages as
a result of nonpayment, the beneficiary may recover damages resulting from
the refusal to pay to the extent the bank had notice of the damages, unless
the bank proves that it did not pay because of a reasonable doubt
concerning the right of the beneficiary to payment.
(b) If a payment order accepted by the beneficiary's bank instructs
payment to an account of the beneficiary, the bank is obliged to notify the
beneficiary of receipt of the order before midnight of the next
funds transfer business day following the payment date. If the payment
order does not instruct payment to an account of the beneficiary, the bank
is required to notify the beneficiary only if notice is required by the
order. Notice may be given by first class mail or any other means
reasonable in the circumstances. If the bank fails to give the required
notice, the bank is obliged to pay interest to the beneficiary on the
amount of the payment order from the day notice should have been given
until the day the beneficiary learned of receipt of the payment order by
the bank. No other damages are recoverable. Reasonable attorney's fees
are also recoverable if demand for interest is made and refused before an
action is brought on the claim.
(c) The right of a beneficiary to receive payment and damages as stated
in subsection (a) may not be varied by agreement or a funds transfer system
rule. The right of a beneficiary to be notified as stated in subsection
(b) may be varied by agreement of the beneficiary or by a funds transfer
system rule if the beneficiary is notified of the rule before initiation of
the funds transfer.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-405) (from Ch. 26, par. 4A-405)
Sec. 4A-405.
Payment by beneficiary's bank to beneficiary.
(a) If the beneficiary's bank credits an account of the beneficiary of a
payment order, payment of the bank's obligation under Section
4A-404(a) occurs when and to the extent (i) the beneficiary is notified of
the right to withdraw the credit, (ii) the bank lawfully applies the credit
to a debt of the beneficiary, or (iii) funds with respect to the order are
otherwise made available to the beneficiary by the bank.
(b) If the beneficiary's bank does not credit an account of the
beneficiary of a payment order, the time when payment of the bank's
obligation under Section 4A-404(a) occurs is governed by principles of law
that determine when an obligation is satisfied.
(c) Except as stated in subsections (d) and (e), if the beneficiary's
bank pays the beneficiary of a payment order under a condition to payment
or agreement of the beneficiary giving the bank the right to recover
payment from the beneficiary if the bank does not receive payment of the
order, the condition to payment or agreement is not enforceable.
(d) A funds transfer system rule may provide that payments made to
beneficiaries of funds transfers made through the system are provisional
until receipt of payment by the beneficiary's bank of the payment order it
accepted. A beneficiary's bank that makes a payment that is provisional
under the rule is entitled to refund from the beneficiary if (i) the rule
requires that both the beneficiary and the originator be given notice of
the provisional nature of the payment before the funds transfer is
initiated, (ii) the beneficiary, the beneficiary's bank and the
originator's bank agreed to be bound by the rule, and (iii) the
beneficiary's bank did not receive payment of the payment order that it
accepted. If the beneficiary is obliged to refund payment to the
beneficiary's bank, acceptance of the payment order by the beneficiary's
bank is nullified and no payment by the originator of the funds transfer to
the beneficiary occurs under Section 4A-406.
(e) This subsection applies to a funds transfer that includes a payment
order transmitted over a funds transfer system that (i) nets obligations
multilaterally among participants, and (ii) has in effect a loss sharing
agreement among participants for the purpose of providing funds necessary
to complete settlement of the obligations of one or more participants that
do not meet their settlement obligations. If the beneficiary's bank in the
funds transfer accepts a payment order and the system fails to complete
settlement pursuant to its rules with respect to any payment order in the
funds transfer, (i) the acceptance by the beneficiary's bank is nullified
and no person has any right or obligation based on the acceptance, (ii) the
beneficiary's bank is entitled to recover payment from the beneficiary,
(iii) no payment by the originator to the beneficiary occurs under Section
4A-406, and (iv) subject to Section 4A-402(e), each sender in the funds
transfer is excused from its obligation to pay its payment order under
Section 4A-402(c) because the funds transfer has not been completed.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-406) (from Ch. 26, par. 4A-406)
Sec. 4A-406.

Payment by originator to beneficiary; discharge of
underlying obligation.
(a) Subject to Sections 4A-211(e), 4A-405(d), and
4A-405(e), the originator of a funds transfer pays the beneficiary of the
originator's payment order (i) at the time a payment order for the benefit
of the beneficiary is accepted by the beneficiary's bank in the funds
transfer and (ii) in an amount equal to the amount of the order accepted by
the beneficiary's bank, but not more than the amount of the originator's order.
(b) If payment under subsection (a) is made to satisfy an obligation, the
obligation is discharged to the same extent discharge would result from
payment to the beneficiary of the same amount in money, unless (i) the
payment under subsection (a) was made by a means prohibited by the contract
of the beneficiary with respect to the obligation, (ii) the beneficiary,
within a reasonable time after receiving notice of receipt of the order by
the beneficiary's bank, notified the originator of the beneficiary's
refusal of the payment, (iii) funds with respect to the order were not
withdrawn by the beneficiary or applied to a debt of the beneficiary, and
(iv) the beneficiary would suffer a loss that could reasonably have been
avoided if payment had been made by a means complying with the contract.
If payment by the originator does not result in discharge under this
Section the originator is subrogated to the rights of the beneficiary to
receive payment from the beneficiary's bank under Section 4A-404(a).
(c) For the purpose of determining whether discharge of an obligation
occurs under subsection (b), if the beneficiary's bank accepts a payment
order in an amount equal to the amount of the originator's payment order
less charges of one or more receiving banks in the funds transfer, payment
to the beneficiary is deemed to be in the amount of the originator's order
unless upon demand by the beneficiary the originator does not pay the
beneficiary the amount of the deducted charges.
(d) Rights of the originator or of the beneficiary of the funds transfer
under this Section may be varied only by agreement of the originator and
the beneficiary.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/Art. 4A Pt. 5 heading)

 
(810 ILCS 5/4A-501) (from Ch. 26, par. 4A-501)
Sec. 4A-501.

Variation by agreement and effect of funds transfer
system rule.
(a) Except as otherwise provided in this Article, the
rights and obligations of a party to a funds transfer may be varied by
agreement of the affected party.
(b) "Funds transfer system rule" means a rule of an association of banks
(i) governing transmission of payment orders by means of a funds transfer
system of the association or rights and obligations with respect to those
orders, or (ii) to the extent the rule governs rights and obligations
between banks that are parties to a funds transfer in which a Federal
Reserve Bank, acting as an intermediary bank, sends a payment order to the
beneficiary's bank. Except as otherwise provided in this Article, a
funds transfer system rule governing rights and obligations between
participating banks using the system may be effective even if the rule
conflicts with this Article and indirectly affects another party to the
funds transfer who does not consent to the rule. A funds transfer system
rule may also govern rights and obligations of parties other than
participating banks using the system to the extent stated in Sections
4A-404(c), 4A-405(d), and 4A-507(c).

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-502) (from Ch. 26, par. 4A-502)
Sec. 4A-502.

Creditor process served on receiving bank; setoff by
beneficiary's bank.
(a) As used in this Section, "creditor process" means levy, attachment,
garnishment, notice of lien, sequestration, or similar process issued by or
on behalf of a creditor or other claimant with respect to an account.
(b) This subsection applies to creditor process with respect to an
authorized account of the sender of a payment order if the creditor process
is served on the receiving bank. For the purpose of determining rights with
respect to the creditor process, if the receiving bank accepts the payment
order the balance in the authorized account is deemed to be reduced by the
amount of the payment order to the extent the bank did not otherwise
receive payment of the order, unless the creditor process is served at a
time and in a manner affording the bank a reasonable opportunity to act on
it before the bank accepts the payment order.
(c) If a beneficiary's bank has received a payment order for payment to
the beneficiary's account in the bank, the following rules apply:
(d) Creditor process with respect to a payment by the originator to the
beneficiary pursuant to a funds transfer may be served only on the
beneficiary's bank with respect to the debt owed by that bank to the
beneficiary. Any other bank served with the creditor process is not obliged
to act with respect to the process.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-503) (from Ch. 26, par. 4A-503)
Sec. 4A-503.

Injunction or restraining order with respect to funds
transfer. For proper cause and in compliance with applicable law, a court
may restrain (i) a person from issuing a payment order to initiate a funds
transfer, (ii) an originator's bank from executing the payment order of the
originator, or (iii) the beneficiary's bank from releasing funds to the
beneficiary or the beneficiary from withdrawing the funds. A court may not
otherwise restrain a person from issuing a payment order, paying or
receiving payment of a payment order, or otherwise acting with respect to a
funds transfer.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-504) (from Ch. 26, par. 4A-504)
Sec. 4A-504.

Order in which items and payment orders may be charged to
account; order of withdrawals from account.
(a) If a receiving bank has received more than one payment order of the
sender or one or more payment orders and other items that are payable from
the sender's account, the bank may charge the sender's account with respect
to the various orders and items in any sequence.
(b) In determining whether a credit to an account has been withdrawn by
the holder of the account or applied to a debt of the holder of the
account, credits first made to the account are first withdrawn or applied.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-505) (from Ch. 26, par. 4A-505)
Sec. 4A-505.

Preclusion of objection to debit of customer's
account. If a receiving bank has received payment from its
customer with respect to a payment order issued in the name
of the customer as sender and accepted by the bank, and the
customer received notification reasonably identifying the order,
the customer is precluded from asserting that the bank is not
entitled to retain the payment unless the customer notifies the
bank of the customer's objection to the payment within one year
after the notification was received by the customer.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-506) (from Ch. 26, par. 4A-506)
Sec. 4A-506.
Rate of interest.
(a) If, under this Article, a receiving
bank is obliged to pay interest with respect to a payment order issued to
the bank, the amount payable may be determined (i) by agreement of the
sender and receiving bank, or (ii) by a funds transfer system rule if the
payment order is transmitted through a funds transfer system.
(b) If the amount of interest is not determined by an agreement or rule
as stated in subsection (a), the amount is calculated by multiplying the
applicable Federal Funds rate by the amount on which interest is payable,
and then multiplying the product by the number of days for which interest
is payable. The applicable Federal Funds rate is the average of the Federal
Funds rates published by the Federal Reserve Bank of New York for each of
the days for which interest is payable divided by 360. The Federal Funds
rate for any day on which a published rate is not available is the same as
the published rate for the next preceding day for which there is a
published rate. If a receiving bank that accepted a payment order is
required to refund payment to the sender of the order because the funds
transfer was not completed, but the failure to complete was not due to any
fault by the bank, the interest payable is reduced by a percentage equal to
the reserve requirement on deposits of the receiving bank.

(Source: P.A. 86-1291.)
 
(810 ILCS 5/4A-507) (from Ch. 26, par. 4A-507)
Sec. 4A-507. Choice of law.
(a) The following rules apply unless the
affected parties otherwise agree or subsection (c) applies:
(b) If the parties described in each paragraph of subsection (a) have
made an agreement selecting the law of a particular jurisdiction to govern
rights and obligations between each other, the law of that jurisdiction
governs those rights and obligations, whether or not the payment order or
the funds transfer bears a reasonable relation to that jurisdiction.
(c) A funds transfer system rule may select the law of a particular
jurisdiction to govern (i) rights and obligations between participating
banks with respect to payment orders transmitted or processed through the
system, or (ii) the rights and obligations of some or all parties to a
funds transfer any part of which is carried out by means of the system. A
choice of law made pursuant to clause (i) is binding on participating
banks. A choice of law made pursuant to clause (ii) is binding on the
originator, other sender, or a receiving bank having notice that the
funds transfer system might be used in the funds transfer and of the choice
of law by the system when the originator, other sender, or receiving bank
issued or accepted a payment order. The beneficiary of a funds transfer is
bound by the choice of law if, when the funds transfer is initiated, the
beneficiary has notice that the funds transfer system might be used in the
funds transfer and of the choice of law by the system. The law of a
jurisdiction selected pursuant to this subsection may govern, whether or
not that law bears a reasonable relation to the matter in issue.
(d) In the event of inconsistency between an agreement under subsection
(b) and a choice of law rule under subsection (c), the agreement under
subsection (b) prevails.
(e) If a funds transfer is made by use of more than one funds transfer
system and there is inconsistency between choice of law rules of the
systems, the matter in issue is governed by the law of the selected
jurisdiction that has the most significant relationship to the matter in issue.

(Source: P.A. 97-813, eff. 7-13-12.)

Structure Illinois Compiled Statutes