400.4A-506. Rate of interest.
Rate of interest.
400.4A-506. (a) If, under this Article, a receiving bankis obliged to pay interest with respect to a payment order issuedto the bank, the amount payable may be determined (i) byagreement of the sender and receiving bank, or (ii) by afunds-transfer system rule if the payment order is transmittedthrough a funds-transfer system.
(b) If the amount of interest is not determined by anagreement or rule as stated in subsection (a), the amount iscalculated by multiplying the applicable federal funds rate bythe amount on which interest is payable, and then multiplying theproduct by the number of days for which interest is payable. Theapplicable federal funds rate is the average of the federal fundsrates published by the Federal Reserve Bank of New York for eachof the days for which interest is payable divided by threehundred sixty. The federal funds rate for any day on which apublished rate is not available is the same as the published ratefor the next preceding day for which there is a published rate.If a receiving bank that accepted a payment order is required torefund payment to the sender of the order because the fundstransfer was not completed, but the failure to complete was notdue to any fault by the bank, the interest payable is reduced bya percentage equal to the reserve requirement on deposits of thereceiving bank.
(L. 1992 S.B. 448)