Commercial Paper and Banking
You buy a jacket at a clothing store. Do you pay with cash? A credit card? A debit card? A check? How does the shop get its payment if you do not use cash? How does the shop pay the garment maker in Costa Rica from whom it bought its stock of jackets? Check? ACH? Wire transfer? Letter of credit? You want to buy a house or a car and you are asked to sign a promissory note. Why is a bank comfortable giving you a lot of money in exchange for your signature on a piece of paper? All of these payment mechanisms are governed by state and federal laws and regulations that endeavor to make the payment system simple and quick while allocating the risk of loss in the event there is a mistake or fraud. In this class we will study various payment systems and the applicable federal and state statutes and regulations and cases governing the types of payment: negotiable instruments such as promissory notes and checks (Articles 3 and 4 of the Uniform Commercial Code), letters of credit (UCC Article 5, Uniform Customs & Practices 600 and International Standby Practices (“ISP98”), electronic funds transfers, credit and debit cards (UCC Article 4A, the Federal Electronic Funds Transfer Act, Expedited Funds Availability Act, Check 21 Act, Truth In Lending Act, the Consumer Credit Protection Act and the various applicable regulations, such as Reg CC, Reg E, Reg Z and Reg J).