Florida Senate - 2024 SB 772
By Senator Rouson
16-00565A-24 2024772__
1 A bill to be entitled
2 An act relating to misdescription of beneficiaries and
3 banks; amending s. 670.207, F.S.; revising
4 requirements for rights as a beneficiary of a payment
5 order and acceptance of the order when the beneficiary
6 is a nonexistent or unidentifiable person or account;
7 removing rules relating to accepted payment orders;
8 amending s. 670.208, F.S.; revising requirements
9 relating to the misdescription of banks for
10 intermediaries and beneficiaries; providing an
11 effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Section 670.207, Florida Statutes, is amended to
16 read:
17 670.207 Misdescription of beneficiary.—
18 (1)(a) Subject to subsection (2), if, in a payment order
19 received by the beneficiary’s bank, the name, bank account
20 number, or other identification of the beneficiary refers to a
21 nonexistent or unidentifiable person or account, no person has
22 rights as a beneficiary of the order and acceptance of the order
23 cannot occur.
24 (b)(2) If A payment order received by the beneficiary’s
25 bank must identify identifies the beneficiary both by name and
26 by an identifying or bank account number. If and the name and
27 number identify different persons, no person has rights as a the
28 following rules apply:
29 (a) Except as otherwise provided in subsection (3), if the
30 beneficiary’s bank does not know that the name and number refer
31 to different persons, it may rely on the number as the proper
32 identification of the beneficiary of the order and acceptance of
33 the order cannot occur.
34 (2)(a) The beneficiary’s bank must need not determine in
35 good faith, and using reasonable care, whether the name and
36 number refer to the same person. The duty of reasonable care
37 must include, at a minimum, an automated system for name and
38 number match which escalates any transaction with any
39 discrepancy to a human reviewer.
40 (b) If the bank cannot reasonably verify beneficiary’s bank
41 pays the person identified by name or knows that the name and
42 number refer to the same person identify different persons, no
43 person has rights as beneficiary except the person paid by the
44 beneficiary’s bank if that person was entitled to receive
45 payment from the originator of the funds transfer. If no person
46 has rights as beneficiary, acceptance of the order cannot occur
47 until the bank has verified with the originator or the receiving
48 bank that the payment order should be processed and any
49 discrepancy is corrected.
50 (3) If a payment order described in subsection (2) is
51 accepted, the originator’s payment order described the
52 beneficiary inconsistently by name and number, and the
53 beneficiary’s bank pays any person whom the originator did not
54 intend to pay, then the originator is not obliged to pay its
55 order, unless the originator was grossly negligent in sending
56 the original instructions, and the beneficiary’s bank was
57 diligent in ascertaining whether the number and name referred to
58 the same person. the person identified by number as permitted by
59 paragraph (2)(a), the following rules apply:
60 (a) If the originator is a bank, the originator is obliged
61 to pay its order.
62 (b) If the originator is not a bank and proves that the
63 person identified by number was not entitled to receive payment
64 from the originator, the originator is not obliged to pay its
65 order unless the originator’s bank proves that the originator,
66 before acceptance of the originator’s order, had notice that
67 payment of a payment order issued by the originator might be
68 made by the beneficiary’s bank on the basis of an identifying or
69 bank account number even if it identifies a person different
70 from the named beneficiary. Proof of notice may be made by any
71 admissible evidence. The originator’s bank satisfies the burden
72 of proof if it proves that the originator, before the payment
73 order was accepted, signed a writing stating the information to
74 which the notice relates.
75 (4) In a case governed by paragraph (2)(a), If the
76 beneficiary’s bank improperly rightfully pays any the person
77 identified by number and that person was not entitled or
78 intended to receive payment from the originator, the amount paid
79 may be recovered from that person to the extent allowed by the
80 law governing mistake and restitution. as follows:
81 (a) If the originator is obliged to pay its payment order
82 due to gross negligence as stated in subsection (3), the
83 originator has the right to recover. Otherwise, the bank that
84 has borne the loss of the order has the right to recover.
85 (b) If the originator is not a bank and is not obliged to
86 pay its payment order, the originator’s bank has the right to
87 recover.
88 (5)(a) A bank accepting orders at a location in this state,
89 or from a customer who resides in this state, must comply with
90 this section.
91 (b) The bank shall enter into an agreement with any
92 counterparty bank requiring name identification as described in
93 this section and, if any beneficiary bank does not engage in
94 name identification and any loss occurs, the receiving bank
95 shall indemnify the originator.
96 Section 2. Section 670.208, Florida Statutes, is amended to
97 read:
98 670.208 Misdescription of intermediary bank or
99 beneficiary’s bank.—
100 (1) This subsection applies to a Any payment order
101 identifying an intermediary bank or the beneficiary’s bank must
102 use both only by an identifying number and a name.
103 (a) The receiving bank must may rely on the number as the
104 proper identification of the intermediary or beneficiary’s bank
105 and need not determine whether the number identifies a bank and
106 whether the bank identified by number matches the name provided.
107 (b) The sender is obliged to compensate the receiving bank
108 for any loss and expenses incurred by the receiving bank as a
109 result of its reliance on the number in executing or attempting
110 to execute the order.
111 (2) This subsection applies to a payment order identifying
112 an intermediary bank or the beneficiary’s bank both by name and
113 an identifying number if the name and number identify different
114 persons.
115 (a) If the sender is a bank, the receiving bank may rely on
116 the number as the proper identification of the intermediary or
117 beneficiary’s bank if the receiving bank, when it executes the
118 sender’s order, does not know that the name and number identify
119 different persons. The receiving bank need not determine whether
120 the name and number refer to the same person or whether the
121 number refers to a bank. The sender is obliged to compensate the
122 receiving bank for any loss and expenses incurred by the
123 receiving bank as a result of its reliance on the number in
124 executing or attempting to execute the order.
125 (b) If the sender is not a bank and the receiving bank
126 proves that the sender, before the payment order was accepted,
127 had notice that the receiving bank might rely on the number as
128 the proper identification of the intermediary or beneficiary’s
129 bank even if it identifies a person different from the bank
130 identified by name, the rights and obligations of the sender and
131 the receiving bank are governed by paragraph (a), as though the
132 sender were a bank. Proof of notice may be made by any
133 admissible evidence. The receiving bank satisfies the burden of
134 proof if it proves that the sender, before the payment order was
135 accepted, signed a writing stating the information to which the
136 notice relates.
137 (c) Regardless of whether the sender is a bank, the
138 receiving bank may rely on the name as the proper identification
139 of the intermediary or beneficiary’s bank if the receiving bank,
140 at the time it executes the sender’s order, does not know that
141 the name and number identify different persons. The receiving
142 bank must need not determine whether the name and number refer
143 to the same intermediary or beneficiary bank person.
144 (d) If the receiving bank determines knows that the name
145 and number identify different banks persons, reliance on either
146 the name or the number in executing the sender’s payment order
147 is a breach of the obligation stated in s. 670.302(1)(a).
148 Section 3. This act shall take effect July 1, 2024.