§ 554.4401

554.4401 When bank may charge customer’s account. 1. A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payableif it is authorized by the customer and is in accordance with any agreement between thecustomer and bank. 2. A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item. 3. A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check,unless the customer has given notice to the bank of the postdating describing the checkwith reasonable certainty. The notice is effective for the period stated in section 554.4403,subsection 2, for stop-payment orders, and must be received at such time and in such manneras to afford the bank a reasonable opportunity to act on it before the bank takes any actionwith respect to the check described in section 554.4303. If a bank charges against the accountof a customer a check before the date stated in the notice of postdating, the bank is

ank takes any actionwith respect to the check described in section 554.4303. If a bank charges against the accountof a customer a check before the date stated in the notice of postdating, the bank is liable fordamages for the loss resulting from its act. The loss may include damages for dishonor ofsubsequent items under section 554.4402. 4. A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to: a. the original terms of the customer’s altered item; orb. the terms of the customer’s completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper. [C66, 71, 73, 75, 77, 79, 81, §554.4401]94 Acts, ch 1167, §107, 122; 95 Acts, ch 67, §45Referred to in §554.3113 Sat Dec 23 01:57:28 2023 Iowa Code 2024, Section 554.4401 (26, 0)