§ 6A-4-401 - When bank may charge customer's account. - Rhode Island Statutes

SECTION 6A-4-401

   § 6A-4-401  When bank may charge customer'saccount. – (a) A bank may charge against the account of a customer an item that isproperly payable from the account even though the charge creates an overdraft.An item is properly payable if it is authorized by the customer and is inaccordance with any agreement between the customer and bank.

   (b) A customer is not liable for the amount of an overdraftif the customer neither signed the item nor benefited from the proceeds of theitem.

   (c) A bank may charge against the account of a customer acheck that is otherwise properly payable from the account, even though paymentwas made before the date of the check, unless the customer has given notice tothe bank of the postdating describing the check with reasonable certainty. Thenotice is effective for the period stated in § 6A-4-403(b) forstop-payment orders, and must be received at such time and in such manner as toafford the bank a reasonable opportunity to act on it before the bank takes anyaction with respect to the check described in § 6A-4-303. If a bankcharges against the account of a customer a check before the date stated in thenotice of postdating, the bank is liable for damages for the loss resultingfrom its act. The loss may include damages for dishonor of subsequent itemsunder § 6A-4-402.

   (d) A bank that in good faith makes payment to a holder maycharge the indicated account of its customer according to:

   (1) The original terms of the altered item; or

   (2) The terms of the completed item, even though the bankknows the item has been completed unless the bank has notice that thecompletion was improper.