FL
Florida House Bill H0593

Florida 2024 Regular Session

Florida House Bill H0593 Compare Versions

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1010 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
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1414 A bill to be entitled 1
1515 An act relating to misdescription of beneficiaries and 2
1616 banks; amending s. 670.207, F.S.; revising 3
1717 requirements for rights as a beneficiary of the order 4
1818 and acceptance of the order when the beneficiary is a 5
1919 nonexistent or unidentifiable person or account; 6
2020 removing rules relating to accepted payment orders; 7
2121 amending s. 670.208, F.S.; revising requirements 8
2222 relating to the misdescription of banks for 9
2323 intermediaries and beneficiaries; providing an 10
2424 effective date. 11
2525 12
2626 Be It Enacted by the Legislature of the State of Florida: 13
2727 14
2828 Section 1. Section 670.207, Florida Statutes, is amended 15
2929 to read: 16
3030 670.207 Misdescription of beneficiary. — 17
3131 (1)(a) Subject to subsectio n (2), if, in a payment order 18
3232 received by the beneficiary's bank, the name, bank account 19
3333 number, or other identification of the beneficiary refers to a 20
3434 nonexistent or unidentifiable person or account, no person has 21
3535 rights as a beneficiary of the order and acceptance of the order 22
3636 cannot occur. 23
3737 (b)(2) If A payment order received by the beneficiary's 24
3838 bank must identify identifies the beneficiary both by name and 25
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4747 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
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5151 by an identifying or bank account number . If and the name and 26
5252 number identify different persons, no person has rights as a the 27
5353 following rules apply: 28
5454 (a) Except as otherwise provided in subsection (3), if the 29
5555 beneficiary's bank does not know that the name and number refer 30
5656 to different persons, it may rely on the number as the proper 31
5757 identification of the beneficiary of the order and acceptance of 32
5858 the order cannot occur . 33
5959 (2)(a) The beneficiary's bank must need not determine in 34
6060 good faith, and using reasonable care, whether the name and 35
6161 number refer to the same person. The duty of reasonable care 36
6262 must include, at a minimum, an automated system for name and 37
6363 number match which escalates any transaction with any 38
6464 discrepancy to a human reviewer. 39
6565 (b) If the bank cannot reasonably verify beneficiary's 40
6666 bank pays the person identified by name or knows that the name 41
6767 and number refer to the same person identify different persons, 42
6868 no person has rights as beneficiary except the person paid by 43
6969 the beneficiary's bank if that person was entitled to receive 44
7070 payment from the originator of the funds transfer. If no pe rson 45
7171 has rights as beneficiary , acceptance of the order cannot occur 46
7272 until the bank has verified with the originator or the receiving 47
7373 bank that the payment order should be processed and any 48
7474 discrepancy is corrected . 49
7575 (3) If a payment order described in su bsection (2) is 50
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8484 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
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8888 accepted, the originator's payment order described the 51
8989 beneficiary inconsistently by name and number, and the 52
9090 beneficiary's bank pays any person who the originator did not 53
9191 intend to pay, then the originator is not obliged to pay its 54
92-order the person identified by number as permitted by paragraph 55
93-(2)(a), the following rules apply: 56
94- (a) If the originator is a bank, the originator is obliged 57
95-to pay its order. 58
96- (b) If the originator is not a bank and proves that the 59
97-person identified by number was not entitled to receive payment 60
98-from the originator, the originator is not obliged to pay its 61
99-order unless the originator's bank proves that the originator, 62
100-before acceptance of the originator's order, had notice that 63
101-payment of a payment order issued by the originator might be 64
102-made by the beneficiary's bank on the basis of an identifying or 65
103-bank account number even if it identifies a person different 66
104-from the named beneficiary. Proof of notice may be made by any 67
105-admissible evidence. The originator's b ank satisfies the burden 68
106-of proof if it proves that the originator, before the payment 69
107-order was accepted, signed a writing stating the information to 70
108-which the notice relates . 71
109- (4) In a case governed by paragraph (2)(a), If the 72
110-beneficiary's bank improperly rightfully pays any the person 73
111-identified by number and that person was not entitled or 74
112-intended to receive payment from the originator, the amount paid 75
92+order, unless the originator was grossly negligent in sending 55
93+the original instructions, and the beneficiary's bank was 56
94+diligent in ascertaining whether the number and name referred to 57
95+the same person. the person identified by number as permitted by 58
96+paragraph (2)(a), the following rules apply: 59
97+ (a) If the originator is a bank, the originator is obliged 60
98+to pay its order. 61
99+ (b) If the originator is not a bank and proves that the 62
100+person identified by number was not entitled to receive payment 63
101+from the originator, th e originator is not obliged to pay its 64
102+order unless the originator's bank proves that the originator, 65
103+before acceptance of the originator's order, had notice that 66
104+payment of a payment order issued by the originator might be 67
105+made by the beneficiary's bank o n the basis of an identifying or 68
106+bank account number even if it identifies a person different 69
107+from the named beneficiary. Proof of notice may be made by any 70
108+admissible evidence. The originator's bank satisfies the burden 71
109+of proof if it proves that the orig inator, before the payment 72
110+order was accepted, signed a writing stating the information to 73
111+which the notice relates. 74
112+ (4) In a case governed by paragraph (2)(a), If the 75
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121121 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
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125-may be recovered from that person to the extent allowed by the 76
126-law governing mistake and restitutio n. as follows: 77
127- (a) If the originator is obliged to pay its payment order 78
128-as stated in subsection (3), the originator has the right to 79
129-recover. 80
130- (b) If the originator is not a bank and is not obliged to 81
131-pay its payment order, the originator's bank has th e right to 82
132-recover. 83
133- (5)(a) A bank accepting orders at a location in this 84
134-state, or from a customer whose resides in this state, must 85
135-comply with this section. 86
136- (b) The bank shall enter into an agreement with any 87
137-counterparty bank requiring name identification as described in 88
138-this section and, if any beneficiary bank does not engage in 89
139-name identification and any loss occurs, the receiving bank 90
140-shall indemnify the originator. 91
141- Section 2. Section 670.208, Florida Statutes, is amended 92
142-to read: 93
143- 670.208 Misdescription of intermediary bank or 94
144-beneficiary's bank.— 95
145- (1) This subsection applies to a Any payment order 96
146-identifying an intermediary bank or the beneficiary's bank must 97
147-use both only by an identifying number and a name. 98
148- (a) The receiving bank must may rely on the number as the 99
149-proper identification of the intermediary or beneficiary's bank 100
125+beneficiary's bank improperly rightfully pays any the person 76
126+identified by number and that person was not entitled or 77
127+intended to receive payment from the originator, the amount paid 78
128+may be recovered from that person to the extent allowed by the 79
129+law governing mistake and restitution . as follows: 80
130+ (a) If the originator is obliged to pay its payment order 81
131+due to gross negligence as stated in subsection (3) , the 82
132+originator has the right to recover. Otherwise, the bank who has 83
133+borne the loss of the order has the right to recover. 84
134+ (b) If the originator is not a bank and is not obliged to 85
135+pay its payment order, the originator's bank has the right to 86
136+recover. 87
137+ (5)(a) A bank accepting orders at a location in this 88
138+state, or from a customer whose resides in this state, must 89
139+comply with this section. 90
140+ (b) The bank shall enter into an agreement with any 91
141+counterparty bank requiring name identification as described in 92
142+this section and, if any beneficiary bank does not engage in 93
143+name identification and any loss occurs, the receiving bank 94
144+shall indemnify the originator. 95
145+ Section 2. Section 670.208, Fl orida Statutes, is amended 96
146+to read: 97
147+ 670.208 Misdescription of intermediary bank or 98
148+beneficiary's bank.— 99
149+ (1) This subsection applies to a Any payment order 100
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158158 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
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162-and need not determine whether the number identifies a bank and 101
163-whether the bank identified by number matches the name provided . 102
164- (b) The sender is obliged to compensate the receiving bank 103
165-for any loss and expenses incurred by the receiving bank as a 104
166-result of its reliance on the number in executing or attempting 105
167-to execute the order. 106
168- (2) This subsection applies to a payment order ident ifying 107
169-an intermediary bank or the beneficiary's bank both by name and 108
170-an identifying number if the name and number identify different 109
171-persons. 110
172- (a) If the sender is a bank, the receiving bank may rely 111
173-on the number as the proper identification of the int ermediary 112
174-or beneficiary's bank if the receiving bank, when it executes 113
175-the sender's order, does not know that the name and number 114
176-identify different persons. The receiving bank need not 115
177-determine whether the name and number refer to the same person 116
178-or whether the number refers to a bank. The sender is obliged to 117
179-compensate the receiving bank for any loss and expenses incurred 118
180-by the receiving bank as a result of its reliance on the number 119
181-in executing or attempting to execute the order. 120
182- (b) If the sender is not a bank and the receiving bank 121
183-proves that the sender, before the payment order was accepted, 122
184-had notice that the receiving bank might rely on the number as 123
185-the proper identification of the intermediary or beneficiary's 124
186-bank even if it identifies a person different from the bank 125
162+identifying an intermediary bank or the beneficiary's bank must 101
163+use both only by an identifying number and a name. 102
164+ (a) The receiving bank must may rely on the number as the 103
165+proper identification of the intermediary or beneficiary's bank 104
166+and need not determine whether the number identifies a bank and 105
167+whether the bank identified by number matches the name provided. 106
168+ (b) The sender is obliged to compensate the receiving bank 107
169+for any loss and expenses incurred by the receiving bank as a 108
170+result of its reliance on the number in executing or attempting 109
171+to execute the order. 110
172+ (2) This subsection applies to a payment order identifying 111
173+an intermediary bank or the beneficiary's bank both by name and 112
174+an identifying number if the name and number identify different 113
175+persons. 114
176+ (a) If the sender is a bank, the receiving bank may rely 115
177+on the number as the proper ide ntification of the intermediary 116
178+or beneficiary's bank if the receiving bank, when it executes 117
179+the sender's order, does not know that the name and number 118
180+identify different persons. The receiving bank need not 119
181+determine whether the name and number refer to the same person 120
182+or whether the number refers to a bank. The sender is obliged to 121
183+compensate the receiving bank for any loss and expenses incurred 122
184+by the receiving bank as a result of its reliance on the number 123
185+in executing or attempting to execute the orde r. 124
186+ (b) If the sender is not a bank and the receiving bank 125
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195195 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
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199-identified by name, the rights and obligations of the sender and 126
200-the receiving bank are governed by paragraph (a), as though the 127
201-sender were a bank. Proof of notice may be made by any 128
202-admissible evidence. The receiving bank s atisfies the burden of 129
203-proof if it proves that the sender, before the payment order was 130
204-accepted, signed a writing stating the information to which the 131
205-notice relates. 132
206- (c) Regardless of whether the sender is a bank, the 133
207-receiving bank may rely on the nam e as the proper identification 134
208-of the intermediary or beneficiary's bank if the receiving bank, 135
209-at the time it executes the sender's order, does not know that 136
210-the name and number identify different persons. The receiving 137
211-bank must need not determine whether the name and number refer 138
212-to the same intermediary or beneficiary bank person. 139
213- (d) If the receiving bank determines knows that the name 140
214-and number identify different banks persons, reliance on either 141
215-the name or the number in executing the sender's pay ment order 142
216-is a breach of the obligation stated in s. 670.302(1)(a). 143
217- Section 3. This act shall take effect July 1, 2024. 144
199+proves that the sender, before the payment order was accepted, 126
200+had notice that the receiving bank might rely on the number as 127
201+the proper identification of the intermediary or beneficiary's 128
202+bank even if it identifies a person different from the bank 129
203+identified by name, the rights and obligations of the sender and 130
204+the receiving bank are governed by paragraph (a), as though the 131
205+sender were a bank. Proof of notice may be made by any 132
206+admissible evidence. The receiving bank satisfies the burden of 133
207+proof if it proves that the sender, before the payment order was 134
208+accepted, signed a writing stating the information to which the 135
209+notice relates. 136
210+ (c) Regardless of whether the sender is a bank, the 137
211+receiving bank may rely on the name as the proper identification 138
212+of the intermediary or beneficiary's bank if the receiving bank, 139
213+at the time it executes the sender's order, does not know that 140
214+the name and number identify different persons. The receiving 141
215+bank must need not determine whether the name and number refer 142
216+to the same intermediary or beneficiary bank person. 143
217+ (d) If the receiving bank determines knows that the name 144
218+and number identify different banks persons, reliance on either 145
219+the name or the number in exec uting the sender's payment order 146
220+is a breach of the obligation stated in s. 670.302(1)(a). 147
221+ Section 3. This act shall take effect July 1, 2024. 148