Uniform commercial code — funds transfers

Wis. Stat. ch. 410

in effect

Wis. Stat. § 410.101 Short title

This chapter may be cited as uniform commercial code — funds transfers.

Wis. Stat. § 410.102 Subject matter

Except as otherwise provided in s. 410.108, this chapter applies to funds transfers as defined in s. 410.104 (1).

Wis. Stat. § 410.103 Payment order; definitions

(1) In this chapter: (a) “Beneficiary” means the person to be paid by the beneficiary’s bank. (b) “Beneficiary’s bank” means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account. (c) “Payment order” means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if all of the following apply: 1. The instruction does not state a condition to payment to the beneficiary other than time of payment. 2. The receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender. 3. The instruction is transmitted by the sender directly to the receiving bank or to an agent, funds-transfer system, or communication system for transmittal to the receiving bank. (d) “Receiving bank” means the bank to which the sender’s instruction is addressed. (e) “Sender” means the person giving the instruction to the receiving bank and includes a customer described in s. 410.202 (4). (2) If an instruction complying with sub. (1) (c) is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment. (3) A payment order is issued when it is sent to the receiving bank.

Wis. Stat. § 410.104 Funds transfer; definitions

In this chapter: (1) “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. “Funds transfer” 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. (2) “Intermediary bank” means a receiving bank other than the originator’s bank or the beneficiary’s bank. (3) “Originator” means the sender of the first payment order in a funds transfer. (4) “Originator’s bank” means the receiving bank to which the payment order of the originator is issued if the originator is not a bank or the originator if the originator is a bank.

Wis. Stat. § 410.105 Other definitions

(1) In this chapter: (a) “Authorized account” means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account. (b) “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this chapter. (c) “Customer” means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders. (d) “Funds-transfer business day” of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and for cancellations and amendments of payment orders. (e) “Funds-transfer system” means a wire transfer network, automated clearinghouse, or other communication system of a clearinghouse or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed. (f) “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing. (g) “Prove” with respect to a fact means to meet the burden of establishing the fact. (2) Other definitions applying to this chapter and the sections in which they appear are: (a) “Acceptance” — s. 410.209. (b) “Beneficiary” — s. 410.103 (1) (a). (c) “Beneficiary’s bank” — s. 410.103 (1) (b). (d) “Executed” — s. 410.301 (1). (e) “Execution date” — s. 410.301 (2). (f) “Funds transfer” — s. 410.104 (1). (g) “Funds-transfer system rule” — s. 410.501 (2) (a). (h) “Intermediary bank” — s. 410.104 (2). (i) “Originator” — s. 410.104 (3). (j) “Originator’s bank” — s. 410.104 (4). (k) “Payment by beneficiary’s bank to beneficiary” — s. 410.405. (L) “Payment by originator to beneficiary” — s. 410.406. (m) “Payment by sender to receiving bank” — s. 410.403. (n) “Payment date” — s. 410.401. (p) “Payment order” — s. 410.103 (1) (c). (q) “Receiving bank” — s. 410.103 (1) (d). (r) “Security procedure” — s. 410.201. (s) “Sender” — s. 410.103 (1) (e). (3) The following definitions in ch. 404 apply to this chapter: (a) “Clearinghouse” — s. 404.104 (1) (d). (b) “Item” — s. 404.104 (1) (i). (c) “Suspends payments” — s. 404.104 (1) (L). (4) In addition ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

Wis. Stat. § 410.106 Time payment order is received

(1) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to receipt of a notice stated in s. 401.202 (6). A receiving bank may fix a cutoff time or times on a funds-transfer business day for the receipt and processing of payment orders and communications canceling or amending payment orders. Different cutoff times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cutoff time may apply to senders generally or different cutoff times may apply to different senders or categories of payment orders. If a payment order or communication canceling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cutoff 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. (2) If this chapter 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 chapter.

Wis. Stat. § 410.107 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 chapter to the extent of the inconsistency.

Wis. Stat. § 410.108 Relationship to Electronic Fund Transfer Act

(1) Except as provided in sub. (2), this chapter does not apply to a funds transfer any part of which is governed by the electronic fund transfer act, 15 USC 1693 to 1693r. (2) This chapter applies to a funds transfer that is a remittance transfer, as defined in 15 USC 1693o-1, unless the remittance transfer is an electronic fund transfer, as defined in 15 USC 1693a. (3) In a funds transfer to which this chapter applies, in the event of an inconsistency between an applicable provision of this chapter 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.

Wis. Stat. § 410.201 Security procedure

“Security procedure” means a procedure established by agreement of a customer and a receiving bank to verify that a payment order or communication amending or canceling a payment order is that of the customer or to detect 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.

Wis. Stat. § 410.202 Authorized and verified payment orders

(1) 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. (2) (a) 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 all of the following apply: 1. The security procedure is a commercially reasonable method of providing security against unauthorized payment orders. 2. 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. (b) 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. (3) Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer that are 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 considered to be commercially reasonable if all of the following apply: (a) 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. (b) The customer expressly agreed in writing to be bound by any payment order, whether or not authorized, issued in the customer’s name and accepted by the bank in compliance with the security procedure chosen by the customer. (4) In this chapter, “sender” includes the customer in whose name a payment order is issued if the order is the authorized order of the customer under sub. (1), or it is effective as the order of the customer under sub. (2). (5) This section applies to amendments and cancellations of payment orders to the same extent that it applies to payment orders. (6) Except as provided in this section and in s. 410.203 (1) (a), rights and obligations arising under this section or s. 410.203 may not be varied by agreement.

Wis. Stat. § 410.203 Unenforceability of certain verified payment orders

(1) If an accepted payment order is not, under s. 410.202 (1), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to s. 410.202 (2), the following rules apply: (a) By express written agreement, the receiving bank may limit the extent to which it is entitled to enforce or retain payment of the payment order. (b) The receiving bank is not entitled to enforce or retain payment of the payment order if the customer proves that the order was not caused, directly or indirectly, by any of the following: 1. A person entrusted at any time with duties to act for the customer with respect to payment orders or the security procedure. 2. A person who obtained access to transmitting facilities of the customer or who obtained, from a source controlled by the customer and without authority of the receiving bank, information facilitating breach of the security procedure, regardless of how the information was obtained or whether the customer was at fault. Information includes any access device, computer software, or the like. (2) This section applies to amendments of payment orders to the same extent that it applies to payment orders.

Wis. Stat. § 410.204 Refund of payment and duty of customer to report with respect to unauthorized payment order

(1) If a receiving bank accepts a payment order issued in the name of its customer as sender that is not authorized and not effective as the order of the customer under s. 410.202, or that is not enforceable, in whole or in part, against the customer under s. 410.203, 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. (2) Reasonable time under sub. (1) may be fixed by agreement as stated in s. 401.302 (1), but the obligation of a receiving bank to refund payment as stated in sub. (1) may not otherwise be varied by agreement.

Wis. Stat. § 410.205 Erroneous payment orders

(1) (a) The rules in pars. (am) to (c) apply if an accepted payment order was transmitted pursuant to a security procedure for the detection of error and any of the following occurs: 1. The payment order erroneously instructed payment to a beneficiary not intended by the sender. 2. The payment order erroneously instructed payment in an amount greater than the amount intended by the sender. 3. The payment order was an erroneously transmitted duplicate of a payment order previously sent by the sender. (am) If the sender proves that the sender or a person acting on behalf of the sender pursuant to s. 410.206 complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in pars. (b) and (c). (b) If the funds transfer is completed on the basis of an erroneous payment order described in par. (a) 1. or 3., the sender is not obliged to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution. (c) If the funds transfer is completed on the basis of a payment order described in par. (a) 2., the sender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution. (2) If the sender of an erroneous payment order described in sub. (1) (a) is not obliged to pay all or part of the order and 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. (3) This section applies to amendments to payment orders to the same extent that it applies to payment orders.

Wis. Stat. § 410.206 Transmission of payment order through funds-transfer or other communication system

(1) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other 3rd-party communication system for transmittal to the bank, the system is considered 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. (2) This section applies to cancellations and amendments of payment orders to the same extent that it applies to payment orders.

Wis. Stat. § 410.207 Misdescription of beneficiary

(1) Subject to sub. (2), 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. (2) 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: (a) Except as otherwise provided in sub. (3), if the beneficiary’s bank does not know that the name and number refer to different persons, it may rely on the number as the proper identification of the beneficiary of the order. The beneficiary’s bank need not determine whether the name and number refer to the same person. (b) If the beneficiary’s bank pays the person identified by name or knows that the name and number identify different persons, no person has rights as beneficiary except the person paid by the beneficiary’s bank if that person was entitled to receive payment from the originator of the funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur. (3) If a payment order described in sub. (2) (intro.) is accepted, the originator’s payment order described the beneficiary inconsistently by name and number and the beneficiary’s bank pays the person identified by number as permitted under sub. (2) (a), the following rules apply: (a) If the originator is a bank, the originator is obliged to pay its order. (b) If the originator is not a bank and proves that the person identified by number was not entitled to receive payment from the originator, the originator is not obliged to pay its order unless the originator’s bank proves that the originator, before acceptance of the originator’s order, had notice that payment of a payment order issued by the originator might be made by the beneficiary’s bank on the basis of an identifying or bank account number even if it identifies a person different from the named beneficiary. Proof of notice may be made by any admissible evidence. The originator’s bank satisfies the burden of proof if it proves that the originator, before the payment order was accepted, signed a writing stating the information to which the notice relates. (4) In a case governed by sub. (2) (a), 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: (a) If the originator is obliged to pay its payment order as stated in sub. (3), the originator has the right to recover. (b) If the originator is not a bank and is not obliged to pay its payment order, the originator’s bank has the right to recover.

Wis. Stat. § 410.208 Misdescription of intermediary bank or beneficiary’s bank

(1) (a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary’s bank only by an identifying number. (am) The receiving bank may rely on the number as the proper identification of the intermediary bank or the beneficiary’s bank and need not determine whether the number identifies a bank. (b) The sender is obliged to compensate the receiving bank for any loss and expenses incurred by the receiving bank as a result of its reliance on the number in executing or attempting to execute the order. (2) (a) 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. (am) If the sender is a bank, the receiving bank may rely on the number as the proper identification of the intermediary bank or the beneficiary’s bank if the receiving bank, when it executes the sender’s order, does not know that the name and number identify different persons. The receiving bank need not determine whether the name and number refer to the same person or whether the number refers to a bank. The sender is obliged to compensate the receiving bank for any loss and expenses incurred by the receiving bank as a result of its reliance on the number in executing or attempting to execute the order. (b) If the sender is not a bank and the receiving bank proves that the sender, before the payment order was accepted, had notice that the receiving bank might rely on the number as the proper identification of the intermediary bank or the beneficiary’s bank even if it identifies a person different from the bank identified by name, the rights and obligations of the sender and the receiving bank are governed by sub. (2) (am), as though the sender were a bank. Proof of notice may be made by any admissible evidence. The receiving bank satisfies the burden of proof if it proves that the sender, before the payment order was accepted, signed a writing stating the information to which the notice relates. (c) Regardless of whether the sender is a bank, the receiving bank may rely on the name as the proper identification of the intermediary bank or the beneficiary’s bank if the receiving bank, at the time it executes the sender’s order, does not know that the name and number identify different persons. The receiving bank need not determine whether the name and number refer to the same person. (d) If the receiving bank knows that the name and number identify different persons, reliance on either the name or the number in executing the sender’s payment order is a breach of the obligation stated in s. 410.302 (1) (a).

Wis. Stat. § 410.209 Acceptance of payment order

(1) Subject to sub. (4), a receiving bank other than the beneficiary’s bank accepts a payment order when it executes the order. (2) Subject to subs. (3) and (4), a beneficiary’s bank accepts a payment order at the earliest of the following times: (a) When the bank pays the beneficiary as stated in s. 410.405 (1) or (2) or notifies the beneficiary of receipt of the order or that the account of the beneficiary has been credited with respect to the order unless the notice indicates that the bank is rejecting the order or that funds with respect to the order may not be withdrawn or used until receipt of payment from the sender of the order. (b) When the bank receives payment of the entire amount of the sender’s order pursuant to s. 410.403 (1) (a) or (b). (c) The opening of the next funds-transfer business day of the bank following the payment date of the order if, at that time, the amount of the sender’s order is fully covered by a withdrawable credit balance in an authorized account of the sender or the bank has otherwise received full payment from the sender, unless the order was rejected before that time or is rejected within one hour after that time, or within one hour after the opening of the next business day of the sender following the payment date if that time is later. If notice of rejection is received by the sender after the payment 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 payment date to the day the sender receives notice or learns that the order was not accepted, counting that day as an elapsed day. If the withdrawable credit balance during that period falls below the amount of the order, the amount of interest payable is reduced accordingly. (3) Acceptance of a payment order cannot occur before the order is received by the receiving bank. Acceptance does not occur under sub. (2) (b) or (c) 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. (4) 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 s. 410.211 (2), the bank may recover from the beneficiary any payment received to the extent allowed by the law governing mistake and restitution.

Wis. Stat. § 410.210 Rejection of payment order

(1) 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, any means complying with the agreement is reasonable and any means not complying is not reasonable unless no significant delay in receipt of the notice resulted from the use of the noncomplying means. (2) 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 s. 410.211 (4) 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. (3) If a receiving bank suspends payments, all unaccepted payment orders issued to it are considered rejected at the time the bank suspends payments. (4) Acceptance of a payment order precludes a later rejection of the order. Rejection of a payment order precludes a later acceptance of the order.

Wis. Stat. § 410.211 Cancellation and amendment of payment order

(1) A communication of the sender of a payment order canceling 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. (2) Subject to sub. (1), a communication by the sender canceling 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. (3) (a) 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. (am) With respect to a payment order accepted by a receiving bank other than the beneficiary’s bank, cancellation or amendment is not effective unless a conforming cancellation or amendment of the payment order issued by the receiving bank is also made. (b) 1. With respect to a payment order accepted by the beneficiary’s bank, cancellation or amendment is not effective unless the order was issued in execution of an unauthorized payment order, or because of a mistake by a sender in the funds transfer which resulted in the issuance of a payment order that does any of the following: a. Duplicates a payment order previously issued by the sender. b. Orders payment to a beneficiary not entitled to receive payment from the originator. c. Orders payment in an amount greater than the amount the beneficiary was entitled to receive from the originator. 2. If the payment order is canceled or amended, the beneficiary’s bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution. (4) An unaccepted payment order is canceled by operation of law at the close of the 5th funds-transfer business day of the receiving bank after the execution date or payment date of the order. (5) 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 considered 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. (6) 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 fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment. (7) 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. (8) A funds-transfer system rule is not effective to the extent it conflicts with sub. (3) (b).

Wis. Stat. § 410.212 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 chapter, 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 chapter or by express agreement. Liability based on acceptance arises only when acceptance occurs as stated in s. 410.209, and liability is limited to that provided in this chapter. 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 chapter or by express agreement.

Wis. Stat. § 410.301 Execution and execution date

(1) 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. (2) “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 execution is reasonably necessary to allow payment to the beneficiary on the payment date.

Wis. Stat. § 410.302 Obligations of receiving bank in execution of payment order

(1) Except as provided in subs. (2) to (4), if the receiving bank accepts a payment order pursuant to s. 410.209 (1), the bank has the following obligations in executing the order: (a) The receiving bank is obliged to issue, on the execution date, a payment order complying with the sender’s order and to follow the sender’s instructions concerning any intermediary bank or funds-transfer system to be used in carrying out the funds transfer or concerning the means by which payment orders are to be transmitted in the funds transfer. If the originator’s bank issues a payment order to an intermediary bank, the originator’s bank is obliged to instruct the intermediary bank according to the instruction of the originator. An intermediary bank in the funds transfer is similarly bound by an instruction given to it by the sender of the payment order it accepts. (b) If the sender’s instruction states that the funds transfer is to be carried out telephonically or by wire transfer or otherwise indicates that the funds transfer is to be carried out by the most expeditious means, the receiving bank is obliged to transmit its payment order by the most expeditious available means, and to instruct any intermediary bank accordingly. If a sender’s instruction states a payment date, the receiving bank is obliged to transmit its payment order at a time and by means reasonably necessary to allow payment to the beneficiary on the payment date or as soon thereafter as is feasible. (2) Unless otherwise instructed, a receiving bank executing a payment order may use any funds-transfer system if use of that system is reasonable in the circumstances, and may 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. (3) Unless sub. (1) (b) applies or the receiving bank is otherwise instructed, the bank may execute a payment order by transmitting its payment order by 1st 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. (4) Unless instructed by the sender, 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 may not instruct a subsequent receiving bank to obtain payment of its charges in the same manner.

Wis. Stat. § 410.303 Erroneous execution of payment order

(1) A receiving bank that 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 that 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 s. 410.402 (3) 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. (2) 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 s. 410.402 (3) if that subsection is otherwise satisfied and 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 instruction of the sender. (3) 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 that 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.

Wis. Stat. § 410.304 Duty of sender to report erroneously executed payment order

If the sender of a payment order that is erroneously executed as stated in s. 410.303 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 s. 410.402 (4) 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.

Wis. Stat. § 410.305 Liability for late or improper execution or failure to execute payment order

(1) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of s. 410.302 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 sub. (3), additional damages are not recoverable. (2) If execution of a payment order by a receiving bank in breach of s. 410.302 results in noncompletion of the funds transfer, failure to use an intermediary bank designated by the originator, or 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 sub. (1), resulting from the improper execution. Except as provided in sub. (3), additional damages are not recoverable. (3) In addition to the amounts payable under subs. (1) and (2), damages, including consequential damages, are recoverable to the extent provided in an express written agreement of the receiving bank. (4) 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. (5) Reasonable attorney fees are recoverable if demand for compensation under sub. (1) or (2) is made and refused before an action is brought on the claim. If a claim is made for breach of an agreement under sub. (4) and the agreement does not provide for damages, reasonable attorney fees are recoverable if demand for compensation under sub. (4) is made and refused before an action is brought on the claim. (6) Except as stated in this section, the liability of a receiving bank under subs. (1) and (2) may not be varied by agreement.

Wis. Stat. § 410.401 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.

Wis. Stat. § 410.402 Obligation of sender to pay receiving bank

(1) This section is subject to ss. 410.205 and 410.207. (2) 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. (3) This subsection is subject to sub. (5) and to s. 410.303. 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. (4) 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 ss. 410.204 and 410.304, interest is payable on the refundable amount from the date of payment. (5) If a funds transfer is not completed as stated in sub. (3) and an intermediary bank is obliged to refund payment as stated in sub. (4) 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 s. 410.302 (1) (a), 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 sub. (4). (6) The right of the sender of a payment order to be excused from the obligation to pay the order as stated in sub. (3) or to receive refund under sub. (4) may not be varied by agreement.

Wis. Stat. § 410.403 Payment by sender to receiving bank

(1) Payment of the sender’s obligation under s. 410.402 to pay the receiving bank occurs as follows: (a) If the sender is a bank, payment occurs when the receiving bank receives final settlement of the obligation through a federal reserve bank or through a funds-transfer system. (b) If the sender is a bank and the sender credited an account of the receiving bank with the sender, or caused an account of the receiving bank in another bank to be credited, payment occurs when the credit is withdrawn or, if not withdrawn, at midnight of the day on which the credit is withdrawable and the receiving bank learns of that fact. (c) If the receiving bank debits an account of the sender with the receiving bank, payment occurs when the debit is made to the extent the debit is covered by a withdrawable credit balance in the account. (2) (a) 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. (b) 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. (c) 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 par. (b) has been exercised. (3) If 2 banks transmit payment orders to each other under an agreement that settlement of the obligations of each bank to the other under s. 410.402 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. (4) In a case not covered by sub. (1), the time when payment of the sender’s obligation under s. 410.402 (2) or (3) occurs is governed by applicable principles of law that determine when an obligation is satisfied.

Wis. Stat. § 410.404 Obligation of beneficiary’s bank to pay and give notice to beneficiary

(1) Subject to ss. 410.211 (5) and 410.405 (4) and (5), 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. (2) 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 1st 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 fees are also recoverable if demand for interest is made and refused before an action is brought on the claim. (3) The right of a beneficiary to receive payment and damages as stated in sub. (1) may not be varied by agreement or a funds-transfer system rule. The right of a beneficiary to be notified as stated in sub. (2) 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.

Wis. Stat. § 410.405 Payment by beneficiary’s bank to beneficiary

(1) If the beneficiary’s bank credits an account of the beneficiary of a payment order, payment of the bank’s obligation under s. 410.404 (1) occurs when and to the extent the beneficiary is notified of the right to withdraw the credit, the bank lawfully applies the credit to a debt of the beneficiary, or funds with respect to the order are otherwise made available to the beneficiary by the bank. (2) 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 s. 410.404 (1) occurs is governed by principles of law that determine when an obligation is satisfied. (3) Except as stated in subs. (4) and (5), 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. (4) 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 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, if the beneficiary, the beneficiary’s bank and the originator’s bank agreed to be bound by the rule, and if 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 s. 410.406. (5) This subsection applies to a funds transfer that includes a payment order transmitted over a funds-transfer system that nets obligations multilaterally among participants, and that 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, all of the following occur: (a) The acceptance by the beneficiary’s bank is nullified and no person has any right or obligation based on the acceptance. (b) The beneficiary’s bank is entitled to recover payment from the beneficiary. (c) No payment by the originator to the beneficiary occurs under s. 410.406. (d) Subject to s. 410.402 (5), each sender in the funds transfer is excused from its obligation to pay its payment order under s. 410.402 (3) because the funds transfer has not been completed.

Wis. Stat. § 410.406 Payment by originator to beneficiary; discharge of underlying obligation

(1) Subject to ss. 410.211 (5) and 410.405 (4) and (5), the originator of a funds transfer pays the beneficiary of the originator’s payment order at the time a payment order for the benefit of the beneficiary is accepted by the beneficiary’s bank in the funds transfer and 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. (2) (a) If payment under sub. (1) 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 all of the following apply: 1. The payment under sub. (1) was made by a means prohibited by the contract of the beneficiary with respect to the obligation. 2. 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. 3. Funds with respect to the order were not withdrawn by the beneficiary or applied to a debt of the beneficiary. 4. The beneficiary would suffer a loss that could reasonably have been avoided if payment had been made by a means complying with the contract. (b) 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 s. 410.404 (1). (3) For the purpose of determining whether discharge of an obligation occurs under sub. (2) (a), 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 considered 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. (4) Rights of the originator or of the beneficiary of a funds transfer under this section may be varied only by agreement of the originator and the beneficiary.

Wis. Stat. § 410.501 Variation by agreement and effect of funds-transfer system rule

(1) Except as otherwise provided in this chapter, the rights and obligations of a party to a funds transfer may be varied by agreement of the affected party. (2) (a) “Funds-transfer system rule” means a rule of an association of banks 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 to the extent the rule applies, governing 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. (b) Except as otherwise provided in this chapter, 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 chapter 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 ss. 410.404 (3), 410.405 (4) and 410.507 (3).

Wis. Stat. § 410.502 Creditor process served on receiving bank; setoff by beneficiary’s bank

(1) 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. (2) 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 considered 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. (3) If a beneficiary’s bank has received a payment order for payment to the beneficiary’s account in the bank, the following rules apply: (a) The bank may credit the beneficiary’s account. The amount credited may be set off against an obligation owed by the beneficiary to the bank or may be applied to satisfy creditor process served on the bank with respect to the account. (b) The bank may credit the beneficiary’s account and allow withdrawal of the amount credited unless creditor process with respect to the account is served at a time and in a manner affording the bank a reasonable opportunity to act to prevent withdrawal. (c) If creditor process with respect to the beneficiary’s account has been served and the bank has had a reasonable opportunity to act on it, the bank may not reject the payment order except for a reason unrelated to the service of process. (4) 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.

Wis. Stat. § 410.503 Injunction or restraining order with respect to funds transfer

For proper cause and in compliance with applicable law, a court may restrain a person from issuing a payment order to initiate a funds transfer, an originator’s bank from executing the payment order of the originator, or 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.

Wis. Stat. § 410.504 Order in which items and payment orders may be charged to account; order of withdrawals from account

(1) 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. (2) 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.

Wis. Stat. § 410.505 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.

Wis. Stat. § 410.506 Rate of interest

(1) If, under this chapter, a receiving bank is obliged to pay interest with respect to a payment order issued to the bank, the amount payable may be determined by agreement of the sender and receiving bank, or may be determined by a funds-transfer system rule if the payment order is transmitted through a funds-transfer system. (2) If the amount of interest is not determined by an agreement or rule as stated in sub. (1), 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.

Wis. Stat. § 410.507 Choice of law

(1) The following rules apply unless the affected parties otherwise agree or sub. (3) applies: (a) The rights and obligations between the sender of a payment order and the receiving bank are governed by the law of the jurisdiction in which the receiving bank is located. (b) The rights and obligations between the beneficiary’s bank and the beneficiary are governed by the law of the jurisdiction in which the beneficiary’s bank is located. (c) The issue of when payment is made pursuant to a funds transfer by the originator to the beneficiary is governed by the law of the jurisdiction in which the beneficiary’s bank is located. (2) If the parties described in each paragraph of sub. (1) 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. (3) (a) A funds-transfer system rule may select the law of a particular jurisdiction to govern any of the following: 1. Rights and obligations between participating banks with respect to payment orders transmitted or processed through the system. 2. Rights and obligations of some or all parties to a funds transfer any part of which is carried out by means of the system. (b) A choice of law made pursuant to par. (a) 1. is binding on participating banks. A choice of law made pursuant to par. (a) 2. 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. (4) In the event of inconsistency between an agreement under sub. (2) and a choice-of-law rule under sub. (3), the agreement under sub. (2) prevails. (5) 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: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/statutes/statutes/410Fetched: 10/7/2026