§ 554.12302

554.12302 Obligations of receiving bank in execution of payment order. 1. Except as provided in subsections 2 through 4, if the receiving bank accepts a payment order pursuant to section 554.12209, subsection 1, the bank has the following obligations inexecuting the order: a. The receiving bank is obligated to issue, on the execution date, a payment order complying with the sender’s order and to follow the sender’s instructions concerning anyintermediary bank or funds-transfer system to be used in carrying out the funds transfer,or the means by which payment orders are to be transmitted in the funds transfer. If theoriginator’s bank issues a payment order to an intermediary bank, the originator’s bankshall 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 bythe 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 becarried out by the most expeditious means, the receiving bank is obligated to transmit

r is to be carried out telephonically or by wire transfer or otherwise indicates that the funds transfer is to becarried out by the most expeditious means, the receiving bank is obligated to transmit itspayment order by the most expeditious available means, and to instruct any intermediarybank accordingly. If a sender’s instruction states a payment date, the receiving bank shalltransmit the receiving bank’s payment order at a time and by means reasonably necessaryto 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 under the circumstances,and issue a payment order to the beneficiary’s bank or to an intermediary bank throughwhich a payment order conforming to the sender’s order can expeditiously be issued tothe beneficiary’s bank if the receiving bank exercises ordinary care in the selection of theintermediary bank. A receiving bank is not required to follow an instruction of the senderdesignating a funds-transfer system to be used in carrying out the funds transfer if thereceiving bank, in good

termediary bank. A receiving bank is not required to follow an instruction of the senderdesignating a funds-transfer system to be used in carrying out the funds transfer if thereceiving bank, in good faith, determines that it is not feasible to follow the instruction orthat following the instruction would unduly delay completion of the funds transfer. 3. Unless subsection 1, paragraph 'b', applies or the receiving bank is otherwise instructed, the receiving bank may execute a payment order by transmitting the receivingbank’s payment order by first class mail or by any means reasonable under the circumstances.If the receiving bank is instructed to execute the sender’s order by transmitting the receivingbank’s payment order by a particular means, the receiving bank may issue the paymentorder 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 orderby issuing a payment order in an amount equal to the amount of the sender’s order less theamount of the charges, and may not instruct a subsequent

n connection with the execution of the sender’s orderby issuing a payment order in an amount equal to the amount of the sender’s order less theamount of the charges, and may not instruct a subsequent receiving bank to obtain paymentof its charges in the same manner. 92 Acts, ch 1146, §22Referred to in §554.12208, 554.12305, 554.12402 Sat Dec 23 11:02:55 2023 Iowa Code 2024, Section 554.12302 (25, 0)