Negotiable Instruments, Bank Deposits and Collections, and Other Payment Systems

The significant legal developments concerning negotiable instruments, bank deposits and collections, and other payment systems that occurred since the last Uniform Commercial Code (UCC) Survey are reviewed. In October 1992, the Federal Reserve Board requested comment on a proposal to change the opening time for the Federal Reserve's proprietary wire transfer system (Fedwire) from 8:30 a.m. Eastern Time to 6:30 a.m. Eastern Time, effective October 4, 1993. Under the Fed's current risk reduction program, a depository institution establishes a maximum amount of intraday overdrafts that it may incur over Fedwire. In October 1992, the Fed issued 2 policy statements under its risk reduction program related to the measurement and pricing of daylight overdrafts. Also in October 1992, the Fed adopted as a final rule a modified version of its 1991 proposal for same-day settlement of checks. The final rule provides that a paying bank must settle for a check by the close of Fedwire on the day of presentment, without imposing a presentment fee, if it is processed by 8:00 a.m.