HB-6458, As Passed House, September 19, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 6458

     A bill to amend 1962 PA 174, entitled

"Uniform commercial code,"

by amending section 4403 (MCL 440.4403), as amended by 1993 PA 130.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4403. (1) A customer or any person authorized to draw on

the account if there is more than 1 person may stop payment of any

item drawn on the customer's account or close the account by an

order to the bank describing the item or account with reasonable

certainty received at a time and in a manner that affords the bank

a reasonable opportunity to act on it before any action by the bank

with respect to the item described in section 4303. If the

signature of more than 1 person is required to draw on an account,

any of these persons may stop payment or close the account.

     (2) A stop-payment order is effective for 6 months, but it

lapses after 14 calendar days if the original order was oral and

was not confirmed in writing within that period. A stop-payment

order may be renewed for additional 6-month periods by a writing

given to the bank within a period during which the stop-payment

order is effective.

     (3) If a customer of a bank requests a stop-payment order

under this section because 1 or more blank checks of the customer

were stolen or the customer was a victim of identity theft as

defined in section 3 of the identity theft protection act, 2004 PA

452, MCL 445.63, and the customer provides the bank with a copy of

a police report evidencing the customer's claim that 1 or more

checks were stolen or he or she was a victim of identity theft, the

bank shall do all of the following:

     (a) Have the customer prepare, sign, and deliver to the bank

an affidavit of fraud and forgery, in a form approved by the

department of state police, or an affidavit of identity theft as

described in section 11 of the identity theft protection act, 2004

PA 452, MCL 445.71.

     (b) If the bank dishonors or returns an item subject to the

stop-payment order, provide the customer with the name of the

person who presented the item for payment or make available to the

customer a copy of the dishonored or returned item. In addition,

the bank may do 1 of the following, if applicable:

     (i) If the person who presented the item for payment is a

merchant that accepted the item as payment for goods and services,

notify the merchant that the reason for the dishonor or return of

the item is that identity theft may have occurred and offer to

provide the merchant with a copy of the customer's signed affidavit

under subdivision (a).

     (ii) If the person who presented the item for payment is a

presenting bank, notify the presenting bank that the reason for the

dishonor or return of the item is that identity theft may have

occurred and offer to provide the presenting bank with a copy of

the customer's signed affidavit under subdivision (a). A presenting

bank that receives a notice and a copy of an affidavit under this

subparagraph shall notify the merchant that accepted the item as

payment for goods and services that the reason for the dishonor or

return of the item is that identity theft may have occurred and, if

the presenting bank has a copy of the affidavit, offer to provide

the merchant with a copy of the customer's signed affidavit under

subdivision (a).

(4)  (3) The burden of establishing the fact and amount of

loss resulting from the payment of an item contrary to a stop-

payment order or order to close an account is on the customer. The

loss from payment of an item contrary to a stop-payment order may

include damages for dishonor of subsequent items under section

4402.