Wire Transfer Agreement Requirements

When submitting transfer requests or related instructions, the customer is responsible for providing all necessary information required by the bank. The bank`s service is designed solely to respond to customer information. As a result, any inaccuracies in the information provided by the client may result in an involuntary transfer of funds. The Bank assumes no responsibility and will not be liable to the Client for any information provided by the Client in a transfer request or related instructions that is inaccurate, incomplete or otherwise incorrect. The Client acknowledges and agrees that, in accordance with Article 4A of the UCC, the Bank is entitled to rely on the numbers provided by the Client to identify banks, beneficiaries and other parties to the transfer, even if such numbers do not correspond or do not correspond to the names of these parties as provided by the Client. The Bank and any other recipient financial institution are not required to determine whether a name and number identify the same person or institution. The Customer acknowledges that payment of a transfer request or related instructions from the Beneficiary`s bank may be made on the basis of an identification or bank account number, even if it identifies a person other than the Designated Beneficiary. 4.3 The Bank may process transfers received from the Client in any order favourable to the Bank, regardless of the order in which they are received. If more than one transfer request is made at the same time or approximately at the same time and the funds available in the relevant account do not cover all such orders or requests, the Bank may, at its sole discretion, execute as many orders or requests as possible within the dollar limits of such available funds. THIS TRANSFER SERVICE SCHEDULE (hereinafter this “Schedule”) is prepared by and between LendingClub BANK (“Bank”) and the aforementioned company, partnership, limited liability company, sole proprietorship, non-profit association or organization, or any other commercial or governmental entity or other public entity (the “Customer”) mentioned above and is incorporated by reference into the Framework Agreement for the Cash Management Services of the parties (the “Agreement”). This Annex applies to all transfer and remittance services provided by the Bank to the Client in accordance with this Annex (hereinafter the “Service”). The Service may be used in conjunction with The Corporate Online Banking Service (or “Online Banking Service”) and this Schedule shall be construed in accordance with the terms of the Business Online Banking Service. All capitalized terms used here without definition have the meanings ascribed to them in the Agreement.

Except as expressly provided in this Annex, this Annex and any changes to this Policy shall prevail to the extent that this Annex does not comply with the terms of the Agreement or the Terms of Online Banking for Businesses described therein, but only to the extent necessary to resolve such conflict. This Annex shall enter into force when signed by both Parties and that date shall be as set out above. 9.2 The Client is strictly responsible for establishing and maintaining its own reasonable and commercially reasonable security procedures to protect against the unauthorised transmission of transfers to the Bank. The Customer must connect to this Bank to unauthorized transmissions, disclosures and access to security-related items, including information relating to the transmission of transfers, such as security procedures, instructions, passwords and user identifications, as well as systems and devices connected to the Bank, its information, systems and devices (hereinafter collectively referred to as “Security Relevant Elements”). Enable, prevent, and protect access to it. Customer shall establish, maintain and apply its own commercially reasonable security practices, techniques and procedures with respect to access, storage and maintenance of security-related items in order to protect against unauthorized transmission and access to security-related items. Such practices, techniques and procedures shall not be inferior to the security requirements described in this Annex or otherwise applicable to the Service. 22. Governing Law. In addition to the terms of the parties` agreement, the parties agree that if a payment order governed in this Annex is part of a money transfer subject to the Federal Law on Electronic Funds Transfer, all acts and disputes between the Customer or a third party provider (as defined in the Contract) acting on behalf of the Customer and the Bank will be subject to Article 4A of the UCC, which is amended in this Annex. Under Article 12 of the Uniform Commercial Code (`the UCC`), a bank bears the risk of loss for any unauthorised transfer. However, it is possible for a bank to pass on this risk to the customer if (1) the authorized customer initiates the transfer or (2) the bank and the customer agree on a security procedure to verify the authenticity of a transfer.

A security procedure is defined by the UCC as another form of verification than a comparison of the signature on a payment order with the signature on file. In Chávez v. Mercantil Commercebank, N.A., the United States Court of Appeals for the Eleventh Circuit, the United States Court of Appeals for the Eleventh Circuit dealt with a case involving an allegedly fraudulent transfer of more than $300,000. The case occurred after the plaintiff opened an account with the defendant bank. Under the account agreement, the applicant had to choose the security procedures that the bank would use to verify any transfer request. The agreement provided for three options and allowed the applicant to choose up to two of them. The applicant chose only one, where the bank had to verify the applicant`s signature at each transfer request. One of the other options that the applicant had not chosen was for the bank to use other methods to verify a transfer request. Shortly after the applicant opened the account, he returned to his home country of Venezuela. While the applicant was in Venezuela, another person arrived at the bank to request a transfer from the applicant`s account. The bank verified the signature, looked at a photo ID and had the application verified by two bank managers. The bank transferred $329,000 from the applicant`s account in the Dominican Republic.

The Eleventh Circuit briefly addressed the UCC`s Law on Remittances. The court then concluded that the bank`s security procedures did not meet the requirements of the UCC because the only “procedure” accepted by the bank and the plaintiff was to verify a signature. As this procedure was not sufficient under the UCC, the bank could not pass on the risk of loss to the customer. The bank tried to argue that the agreement provided that it could take other precautions. However, the court pointed out that if the agreement allowed the bank to take additional security measures, the bank was not obliged to do so. As a result, the bank can be held liable for the entire $329,000 fraudulently transferred from the applicant`s account. This case reminds us that banks need to take a close look at money transfer agreements. Banks must ensure that they have adequate security procedures in place that comply with UCC requirements.

If the bank does not comply with the UCC, it may be held responsible for fraudulent transfers from customer accounts. 13. Advice and explanations. All transfers accepted by the Bank (including transfers sent or received in the Customer`s name) will be displayed in the Customer`s daily online banking service history and on the Customer`s regular account statement issued by the Bank in connection with the deposit accounts to or from which the Customer`s transfer was made. If the customer opts for the special notification function of the bank, the bank will also send the customer a consultation or notification to the email addresses provided by the customer if a transfer has been accepted. .