§ 4-4.5-506 — Rate of interest

Colorado § 4-4.5-506

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Funds Transfers

Text

(a) If, under this article, a receiving bank is
obliged to pay interest with respect to a payment order issued to the bank, the
amount payable may be determined (i) by agreement of the sender and receiving
bank, or (ii) by a funds-transfer system rule if the payment order is transmitted
through a funds-transfer system.

(b) If the amount of interest is not determined by an agreement or rule as
stated in subsection (a) of this section, the amount is calculated by multiplying the
applicable federal funds rate by the amount on which interest is payable, and then
multiplying the product by the number of days for which interest is payable. The
applicable federal funds rate is the average of the federal funds rates published by
the federal reserve bank of New York for each of the days for which interest is
payable divided by three hundred sixty. The federal funds rate for any day on which
a published rate is not available is the same as the published rate for the next
preceding day for which there is a published rate. If a receiving bank that accepted
a payment order is required to refund payment to the sender of the order because
the funds transfer was not completed, but the failure to complete was not due to
any fault by the bank, the interest payable is reduced by a percentage equal to the
reserve requirement on deposits of the receiving bank.

Legislative History

Source: L. 90: Entire article added, p. 361, � 1, effective January 1, 1991.