554.12506 Rate of interest. 1. If, under this Article, a receiving bank is to pay interest with respect to a payment order issued to the bank, the amount payable may be determined by agreement of the sender andreceiving bank, or by a funds-transfer system rule if the payment order is transmitted througha funds-transfer system. 2. If the amount of interest is not determined by an agreement or rule as stated in subsection 1, the amount is calculated by multiplying the applicable federal funds rate bythe amount on which interest is payable, and then multiplying the product by the numberof days for which interest is payable. The applicable federal funds rate is the average ofthe federal funds rates published by the federal reserve bank of New York for each of thedays for which interest is payable divided by three hundred sixty. The federal funds ratefor any day on which a published rate is not available is the same as the published ratefor the next preceding day for which there is a published rate. If a receiving bank thataccepted a payment order is required to refund payment to the sender of the order becausethe funds transfer was not completed, but the failure to complete was not lished rate. If a receiving bank thataccepted a payment order is required to refund payment to the sender of the order becausethe funds transfer was not completed, but the failure to complete was not due to any faultby the receiving bank, the interest payable is reduced by a percentage equal to the reserverequirement on deposits of the receiving bank. 92 Acts, ch 1146, §37 Sat Dec 23 11:03:01 2023 Iowa Code 2024, Section 554.12506 (25, 0)
Iowa Legal Code