8.4A-506 - A-506. Rate of interest. - Virginia Statutes

§ 8.4A-506. Rate of interest.

(a) If, under this title, a receiving bank is obliged to pay interest withrespect to a payment order issued to the bank, the amount payable may bedetermined (i) by agreement of the sender and receiving bank, or (ii) by afunds-transfer system rule if the payment order is transmitted through afunds-transfer system.

(b) If the amount of interest is not determined by an agreement or rule asstated in subsection (a) of this section, the amount is calculated bymultiplying the applicable Federal Funds rate by the amount on which interestis payable, and then multiplying the product by the number of days for whichinterest is payable. The applicable Federal Funds rate is the average of theFederal Funds rates published by the Federal Reserve Bank of New York foreach of the days for which interest is payable divided by 360. The FederalFunds rate for any day on which a published rate is not available is the sameas the published rate for the next preceding day for which there is apublished rate. If a receiving bank that accepted a payment order is requiredto refund payment to the sender of the order because the funds transfer wasnot completed, but the failure to complete was not due to any fault by thebank, the interest payable is reduced by a percentage equal to the reserverequirement on deposits of the receiving bank.

(1990, c. 9.)