§ 554.12506 — Rate of interest

Iowa § 554.12506

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. If, under this Article, a receiving bank is to pay interest with respect to a payment order
issued to the bank, the amount payable may be determined by agreement of the sender and
receivingbank, orbyafunds-transfersystemruleifthepaymentorderistransmittedthrough
a funds-transfer system.
2. If the amount of interest is not determined by an agreement or rule as stated in
subsection 1, 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 receiving bank, the interest payable is reduced by a percentage equal to the reserve
requirement on deposits of the receiving bank.