1 / 10

Chapter 24 Checks, The Banking System and E-Money

Chapter 24 Checks, The Banking System and E-Money. Learning Objectives. On what type of check does a bank serve as both the drawer and the drawee? When may a bank property dishonor a customer’s check without liability?

tyler
Download Presentation

Chapter 24 Checks, The Banking System and E-Money

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Chapter 24Checks, The Banking System and E-Money

  2. Learning Objectives • On what type of check does a bank serve as both the drawer and the drawee? • When may a bank property dishonor a customer’s check without liability? • Under what circumstances might a bank not be liable for payment of a check with a forged signature? • What is E-Money? How is it used and and stored?

  3. Checks • Special type of draft by maker (drawer) drawn on a bank (drawee) ordering bank to pay third party (payee). • Cashier’s Check—bank is both drawer and drawee. • Traveler’s Check—payable on demand, payable by a financial institution, designated as a traveler’s check. • Certified Check—accepted in writing by drawee bank.

  4. Bank’s Duty to Honor Checks • Drawee has a legal duty to honor Drawer’s checks. • If it wrongfully dishonors a check, it is liable for damages. • Overdrafts • Postdated Checks (Notice required) • Stale Checks (6 months) • Stop-Payment Orders (if written, 6 months)

  5. Bank’s Duty to Honor Checks • Death or Incompetence of Customer • Forged Drawers’ Signatures • General Rule—no legal effect • Customer Negligence—bank normally not liable. • Timely Examination of Statements by Customer • Time Limit for Bank’s Liability

  6. Bank’s Duty to Honor Checks • Forged Instruments • Bank must recredit customer’s account if payment made on forged instrument. • Altered Checks • Bank has a Duty to Accept Deposits • Availability Schedule for Deposited Checks • Collection Process (local and Federal Reserve)

  7. Electronic Fund Transfers • EFT is a transfer of funds via the use electronic means • Types of EFT systems: • Automated Teller Machine • Point of Sale (debit card) • Direct Deposit and Withdrawal • Pay by Telephone • Error Resolution and Damages • Commercial Transfers

  8. E-Money • Stored-Value Cards (pre-paid cards for use with long distance, cellular and library copy machines) • Smart Cards—can authenticate the validity of transactions with digital signatures. • Deposit Insurance • Legal Protection • Privacy Protection

  9. Online Banking • Online Banking Services • Bill consolidation • Transfer between accounts • Loan applications • Virtual Banks

  10. Uniform Money Services Act • 2001 Uniform law proposed by the National Conference of Commissioners on Uniform State Laws. • Traditional services • Internet Based Money Services

More Related