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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 the person identified by number as permitted by paragraph 55
(2)(a), the following rules apply: 56
(a) If the originator is a bank, the originator is obliged 57
to pay its order. 58
(b) If the originator is not a bank and proves that the 59
person identified by number was not entitled to receive payment 60
from the originator, the originator is not obliged to pay its 61
order unless the originator's bank proves that the originator, 62
before acceptance of the originator's order, had notice that 63
payment of a payment order issued by the originator might be 64
made by the beneficiary's bank on the basis of an identifying or 65
bank account number even if it identifies a person different 66
from the named beneficiary. Proof of notice may be made by any 67
admissible evidence. The originator's b ank satisfies the burden 68
of proof if it proves that the originator, before the payment 69
order was accepted, signed a writing stating the information to 70
which the notice relates . 71
(4) In a case governed by paragraph (2)(a), If the 72
beneficiary's bank improperly rightfully pays any the person 73
identified by number and that person was not entitled or 74
intended to receive payment from the originator, the amount paid 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
may be recovered from that person to the extent allowed by the 76
law governing mistake and restitutio n. as follows: 77
(a) If the originator is obliged to pay its payment order 78
as stated in subsection (3), the originator has the right to 79
recover. 80
(b) If the originator is not a bank and is not obliged to 81
pay its payment order, the originator's bank has th e right to 82
recover. 83
(5)(a) A bank accepting orders at a location in this 84
state, or from a customer whose resides in this state, must 85
comply with this section. 86
(b) The bank shall enter into an agreement with any 87
counterparty bank requiring name identification as described in 88
this section and, if any beneficiary bank does not engage in 89
name identification and any loss occurs, the receiving bank 90
shall indemnify the originator. 91
Section 2. Section 670.208, Florida Statutes, is amended 92
to read: 93
670.208 Misdescription of intermediary bank or 94
beneficiary's bank.— 95
(1) This subsection applies to a Any payment order 96
identifying an intermediary bank or the beneficiary's bank must 97
use both only by an identifying number and a name. 98
(a) The receiving bank must may rely on the number as the 99
proper identification of the intermediary or beneficiary's bank 100
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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
and need not determine whether the number identifies a bank and 101
whether the bank identified by number matches the name provided . 102
(b) The sender is obliged to compensate the receiving bank 103
for any loss and expenses incurred by the receiving bank as a 104
result of its reliance on the number in executing or attempting 105
to execute the order. 106
(2) This subsection applies to a payment order ident ifying 107
an intermediary bank or the beneficiary's bank both by name and 108
an identifying number if the name and number identify different 109
persons. 110
(a) If the sender is a bank, the receiving bank may rely 111
on the number as the proper identification of the int ermediary 112
or beneficiary's bank if the receiving bank, when it executes 113
the sender's order, does not know that the name and number 114
identify different persons. The receiving bank need not 115
determine whether the name and number refer to the same person 116
or whether the number refers to a bank. The sender is obliged to 117
compensate the receiving bank for any loss and expenses incurred 118
by the receiving bank as a result of its reliance on the number 119
in executing or attempting to execute the order. 120
(b) If the sender is not a bank and the receiving bank 121
proves that the sender, before the payment order was accepted, 122
had notice that the receiving bank might rely on the number as 123
the proper identification of the intermediary or beneficiary's 124
bank even if it identifies a person different from the bank 125
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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
identified by name, the rights and obligations of the sender and 126
the receiving bank are governed by paragraph (a), as though the 127
sender were a bank. Proof of notice may be made by any 128
admissible evidence. The receiving bank s atisfies the burden of 129
proof if it proves that the sender, before the payment order was 130
accepted, signed a writing stating the information to which the 131
notice relates. 132
(c) Regardless of whether the sender is a bank, the 133
receiving bank may rely on the nam e as the proper identification 134
of the intermediary or beneficiary's bank if the receiving bank, 135
at the time it executes the sender's order, does not know that 136
the name and number identify different persons. The receiving 137
bank must need not determine whether the name and number refer 138
to the same intermediary or beneficiary bank person. 139
(d) If the receiving bank determines knows that the name 140
and number identify different banks persons, reliance on either 141
the name or the number in executing the sender's pay ment order 142
is a breach of the obligation stated in s. 670.302(1)(a). 143
Section 3. This act shall take effect July 1, 2024. 144