336.4A-506 RATE OF INTEREST.
(a) If, under this article, a receiving bank is obliged to pay interest with respect to a payment
order issued to the bank, the amount payable may be determined (i) by agreement of the sender
and receiving bank, or (ii) by a funds-transfer system rule if the payment order is transmitted
through a funds-transfer system.
(b) If the amount of interest is not determined by an agreement or rule as stated in subsection
(a), the amount is calculated by multiplying the applicable Federal Funds rate by the amount on
which interest is payable, and then multiplying the product by the number of days for which
interest is payable. The applicable Federal Funds rate is the average of the Federal Funds rates
published by the Federal Reserve Bank of New York for each of the days for which interest
is payable divided by 360. The Federal Funds rate for any day on which a published rate is
not available is the same as the published rate for the next preceding day for which there is a
published rate. If a receiving bank that accepted a payment order is required to refund payment to
the sender of the order because the funds transfer was not completed, but the failure to complete
was not due to any fault by the bank, the interest payable is reduced by a percentage equal to the
reserve requirement on deposits of the receiving bank.
History: 1990 c 582 art 1 s 37