Okla. Stat. tit. 12A § 4A-108
Okla. Stat. tit. 12A, § 4A-108
Oklahoma Code Comment
Article 4A does not apply to a funds transfer any part of which is subject to the Electronic Fund Transfers Act, 15 U.S.C. § 1693 et seq., and its implementing regulation, Regulation E, 12 CFR pt. 205. Thus an electronic payment order originated by an individual by use of a debit card at a point of sale to purchase a new suit or dress, if it is a payment order, is not governed by Article 4A. § 4A-108 and Regulation E § 205.2(b) and (g). The exclusion is broader than this, however. To illustrate, suppose an employer sends funds by Fedwire or a similar network from one financial institution to another, and transfers via automated clearing house (ACH) are then made from the second institution to the accounts of company employees at still other institutions. The transfer over Fedwire is not covered by the Electronic Fund Transfer Act but the subsequent ACH transfers to the consumer accounts are. Regulation E §§ 205.3(b) and 205.2(g); Regulation E Commentary ¶ Q3-3. However, none of the funds transfer is covered under Article 4A, not even the Fedwire transfer, because of the potential conflict between the two sets of rules. This, of course, leaves the Fedwire transfer without rule coverage except for Regulation J (or system rules in other cases). The Official Comment to § 4A-108 suggests that, as necessary, a court might supply any missing rules by using Article 4A by analogy.
Because the coverage of Article 4A is determined by the reach of the Electronic Fund Transfers Act, as amended from time to time, three other points are worth noting. First, to ascertain the coverage of Article 4A in many instances requires in depth knowledge of the scope of the Electronic Fund Transfers Act, including its implementing regulation and the commentary on that regulation. This subject is dealt with, among other places, each year in the annual survey of consumer financial services law in The Business Lawyer. See, e.g., Goldstein, ed., Electronic Fund Transfers, 44 Bus.Law. 1081 (1989).
It might have presented an easier task for the attorney had § 4A-108 instead essentially simply excluded funds transfers from or to a consumer account, but that approach could have caused Article 4A and the Electronic Fund Transfers Act to be less than mutually exclusive if the latter were amended. However, the fact Article 4A contracts or expands as the Electronic Fund Transfers Act does (and as regulations and operating circulars evolve under § 4A-107), may present state law issues, including an issue involving the delegation of legislative power. Oklahoma law on these issues, if they exist, is not clear. Hopefully an Oklahoma court would recognize the validity of such limited delegation as a rational necessity in modern federal-state relations. See 1974 Uniform Consumer Credit Code, Prefatory Note: Federal Preemption of Disclosure and, as providing some precedent of sorts, Gibson Products Co. v. Murphy, 186 Okla. 714, 100 P.2d 453 (1940).
The last point to note concerns the fact that not all consumer fund transfers are subject to the Electronic Fund Transfers Act. For example, under Regulation E § 205.3(e) a transfer of funds that is initiated by a telephone conversation between an individual and an employee of a financial institution and which is not under a prearranged plan for periodic or recurring transfers is not covered. Thus Article 4A could cover such a transfer even though its design is for large dollar transfers by businesses and financial institutions.
To illustrate what that might mean, consider Abyaneh v. Merchants Bank, North, 670 F.Supp. 1298 (M.D.Pa.1987). A person impersonating the holder of an account at a bank opened a savings account at a thrift. By telephone the bank was induced to wire the account balance to the thrift, where the imposter promptly cleaned it out. In the litigation between the bank and the account holder, the latter argued he was protected by the Electronic Fund Transfers Act which would essentially limit his loss to $50. See Regulation E § 205.6. The court found the act inapplicable, which left the issue to be resolved by other law. That other law might initially place the loss on the bank if it could be shown the transfer was not authorized but, absent negligence, it is likely the loss would be shifted to the customer by agreement. Were Article 4A applicable, however, under §§ 4A-201 and 4A-202 the loss would fall on the bank unless the sender is responsible under other law, such as was the case in Gatoil (U.S.A.), Inc. v. Forest Hill State Bank, 1 UCC Rep.Serv.2d (Callaghan) 171 (D.Md.1986), or unless the bank employed in good faith and followed a commercially reasonable security procedure agreed upon by the parties, in which case essentially the loss would fall on the customer, absent any controlling state consumer protection legislation to which Article 4A should be considered to be subject. But, given the security procedure, it is unlikely the loss would occur in the first place. Thus the application of Article 4A to some consumer transactions may be beneficial.
For a further discussion of the Abyaneh and Gatoil cases in relation to Article 4A, see the introductory commentary.