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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to misdescription of beneficiaries and 2
banks; amending s. 670.207, F.S.; revising 3
requirements for rights as a beneficiary of the order 4
and acceptance of the order when the beneficiary is a 5
nonexistent or unidentifiable person or account; 6
removing rules relating to accepted payment orders; 7
amending s. 670.208, F.S.; revising requirements 8
relating to the misdescription of banks for 9
intermediaries and beneficiaries; providing an 10
effective date. 11
12
Be It Enacted by the Legislature of the State of Florida: 13
14
Section 1. Section 670.207, Florida Statutes, is amended 15
to read: 16
670.207 Misdescription of beneficiary. — 17
(1)(a) Subject to subsectio n (2), if, in a payment order 18
received by the beneficiary's bank, the name, bank account 19
number, or other identification of the beneficiary refers to a 20
nonexistent or unidentifiable person or account, no person has 21
rights as a beneficiary of the order and acceptance of the order 22
cannot occur. 23
(b)(2) If A payment order received by the beneficiary's 24
bank must identify identifies the beneficiary both by name and 25
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
by an identifying or bank account number . If and the name and 26
number identify different persons, no person has rights as a the 27
following rules apply: 28
(a) Except as otherwise provided in subsection (3), if the 29
beneficiary's bank does not know that the name and number refer 30
to different persons, it may rely on the number as the proper 31
identification of the beneficiary of the order and acceptance of 32
the order cannot occur . 33
(2)(a) The beneficiary's bank must need not determine in 34
good faith, and using reasonable care, whether the name and 35
number refer to the same person. The duty of reasonable care 36
must include, at a minimum, an automated system for name and 37
number match which escalates any transaction with any 38
discrepancy to a human reviewer. 39
(b) If the bank cannot reasonably verify beneficiary's 40
bank pays the person identified by name or knows that the name 41
and number refer to the same person identify different persons, 42
no person has rights as beneficiary except the person paid by 43
the beneficiary's bank if that person was entitled to receive 44
payment from the originator of the funds transfer. If no pe rson 45
has rights as beneficiary , acceptance of the order cannot occur 46
until the bank has verified with the originator or the receiving 47
bank that the payment order should be processed and any 48
discrepancy is corrected . 49
(3) If a payment order described in su bsection (2) is 50
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
accepted, the originator's payment order described the 51
beneficiary inconsistently by name and number, and the 52
beneficiary's bank pays any person who the originator did not 53
intend to pay, then the originator is not obliged to pay its 54
order, unless the originator was grossly negligent in sending 55
the original instructions, and the beneficiary's bank was 56
diligent in ascertaining whether the number and name referred to 57
the same person. the person identified by number as permitted by 58
paragraph (2)(a), the following rules apply: 59
(a) If the originator is a bank, the originator is obliged 60
to pay its order. 61
(b) If the originator is not a bank and proves that the 62
person identified by number was not entitled to receive payment 63
from the originator, th e originator is not obliged to pay its 64
order unless the originator's bank proves that the originator, 65
before acceptance of the originator's order, had notice that 66
payment of a payment order issued by the originator might be 67
made by the beneficiary's bank o n the basis of an identifying or 68
bank account number even if it identifies a person different 69
from the named beneficiary. Proof of notice may be made by any 70
admissible evidence. The originator's bank satisfies the burden 71
of proof if it proves that the orig inator, before the payment 72
order was accepted, signed a writing stating the information to 73
which the notice relates. 74
(4) In a case governed by paragraph (2)(a), If the 75
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
beneficiary's bank improperly rightfully pays any the person 76
identified by number and that person was not entitled or 77
intended to receive payment from the originator, the amount paid 78
may be recovered from that person to the extent allowed by the 79
law governing mistake and restitution . as follows: 80
(a) If the originator is obliged to pay its payment order 81
due to gross negligence as stated in subsection (3) , the 82
originator has the right to recover. Otherwise, the bank who has 83
borne the loss of the order has the right to recover. 84
(b) If the originator is not a bank and is not obliged to 85
pay its payment order, the originator's bank has the right to 86
recover. 87
(5)(a) A bank accepting orders at a location in this 88
state, or from a customer whose resides in this state, must 89
comply with this section. 90
(b) The bank shall enter into an agreement with any 91
counterparty bank requiring name identification as described in 92
this section and, if any beneficiary bank does not engage in 93
name identification and any loss occurs, the receiving bank 94
shall indemnify the originator. 95
Section 2. Section 670.208, Fl orida Statutes, is amended 96
to read: 97
670.208 Misdescription of intermediary bank or 98
beneficiary's bank.— 99
(1) This subsection applies to a Any payment order 100
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identifying an intermediary bank or the beneficiary's bank must 101
use both only by an identifying number and a name. 102
(a) The receiving bank must may rely on the number as the 103
proper identification of the intermediary or beneficiary's bank 104
and need not determine whether the number identifies a bank and 105
whether the bank identified by number matches the name provided. 106
(b) The sender is obliged to compensate the receiving bank 107
for any loss and expenses incurred by the receiving bank as a 108
result of its reliance on the number in executing or attempting 109
to execute the order. 110
(2) This subsection applies to a payment order identifying 111
an intermediary bank or the beneficiary's bank both by name and 112
an identifying number if the name and number identify different 113
persons. 114
(a) If the sender is a bank, the receiving bank may rely 115
on the number as the proper ide ntification of the intermediary 116
or beneficiary's bank if the receiving bank, when it executes 117
the sender's order, does not know that the name and number 118
identify different persons. The receiving bank need not 119
determine whether the name and number refer to the same person 120
or whether the number refers to a bank. The sender is obliged to 121
compensate the receiving bank for any loss and expenses incurred 122
by the receiving bank as a result of its reliance on the number 123
in executing or attempting to execute the orde r. 124
(b) If the sender is not a bank and the receiving bank 125
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proves that the sender, before the payment order was accepted, 126
had notice that the receiving bank might rely on the number as 127
the proper identification of the intermediary or beneficiary's 128
bank even if it identifies a person different from the bank 129
identified by name, the rights and obligations of the sender and 130
the receiving bank are governed by paragraph (a), as though the 131
sender were a bank. Proof of notice may be made by any 132
admissible evidence. The receiving bank satisfies the burden of 133
proof if it proves that the sender, before the payment order was 134
accepted, signed a writing stating the information to which the 135
notice relates. 136
(c) Regardless of whether the sender is a bank, the 137
receiving bank may rely on the name as the proper identification 138
of the intermediary or beneficiary's bank if the receiving bank, 139
at the time it executes the sender's order, does not know that 140
the name and number identify different persons. The receiving 141
bank must need not determine whether the name and number refer 142
to the same intermediary or beneficiary bank person. 143
(d) If the receiving bank determines knows that the name 144
and number identify different banks persons, reliance on either 145
the name or the number in exec uting the sender's payment order 146
is a breach of the obligation stated in s. 670.302(1)(a). 147
Section 3. This act shall take effect July 1, 2024. 148