Positive Pay Agreement Print

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POSITIVE PAY AGREEMENT

This Agreement is an addendum to the Business Online Banking Agreement and applies if Positive Pay Services (hereinafter the “Services”) are requested by___________________ (Customer) and approved by The Bank of Glen Burnie (Financial Institution).

STANDARD CHECK POSITIVE PAY OPTION

1. Issue File. Customer shall transmit to Financial Institution on every Business Day, by 11:59 PM, an Issue File (the “Issue File”) setting forth the check number, dollar amount, issue date, Account number and an issue indicator for Voids and Issues items with respect to each check drawn by Customer with respect to the Account(s) designated by Customer and Financial Institution for this Positive Pay Service (an “Authorized Account”). The Issue File shall be in a format prescribed by Financial Institution and submitted via the Services, except where otherwise permitted by Financial Institution in its sole and exclusive discretion.

Notwithstanding anything to the contrary in this Agreement or on the Business Online Banking Services’ website, Customer must also utilize the payee verification feature associated with the Positive Pay Services. Financial Institution’s payee verification services require the payee name to match against Customer’s Issue File at a minimum threshold or matching score. The payee name in the Issue File will be electronically compared to the payee name on presented checks. Other information related to the payee name may also be electronically compared as part of the automated verification process to establish a matching score. Such comparisons that result in a minimum threshold or matching score will be deemed to be a matching check. Customer is responsible for complying with the payee verification services’ check specifications as specified by Financial Institution from time to time in order to ensure the highest level of performance from the payee verification services. Any presented check that does not result in a minimum threshold or matching score shall be deemed an exception check and reported as such in accordance with the terms of this Part of the Agreement.

2. Exceptions Report. As in-clearing items are received by Financial Institution, Financial Institution will issue a daily online Exception Check Report with respect to any items that do not match the data contained in the Issue File, including the payee name in connection with the payee verification services. Financial Institution will provide Exceptions to Customer through Financial Institution’s Business Online Banking service by 8:00 AM daily. Customer will review and respond online to all reported Exceptions by 11:00 AM on the date of receipt. Customer will indicate affirmatively whether Customer wishes to pay (a “Pay Decision”) or return (a “Return Decision”) each item on the Report. If Customer wishes to return an item(s), Customer will indicate the specific reason for return. In the event that Customer does not timely respond to the online Exceptions Report, Financial Institution will return item(s) as previously agreed upon between Customer and Financial Institution. Customer agrees to specify one or more authorized persons who shall be available immediately on all Business Days to respond to Financial Institution inquiries regarding an Exceptions Report.

Notwithstanding anything in this Part to the contrary, Financial Institution may, in its sole and absolute discretion, return to the person presenting a check drawn on an Authorized Account for payment over-the-counter at one of Financial Institution’s teller stations any such check that does not appear on an Issue File. Customer acknowledges and agrees that Financial Institution shall have no obligation to inform Customer that any such check has been presented for payment at a Financial Institution teller station. Financial Institution shall have no liability to Customer for wrongful dishonor with respect to any such check.

Financial Institution is not responsible for detecting any Customer error contained in any Issue File, Pay Decision or Return Decision sent by Customer to Financial Institution.

Customer shall submit to Financial Institution a current, reconciled list of all outstanding checks issued on each Authorized Account one (1) week prior to the implementation of the Services hereunder. Depending on the frequency with which Customer issues checks, Financial Institution reserves the right to require Customer to submit one or more additional such lists so that all outstanding, unpaid checks issued on any Authorized Account have been reported to Financial Institution prior to the implementation of the Services.

3. Remedies.

(a) U.C.C. Liability. To the extent applicable, the liability provisions of U.C.C. Articles 3-A and 4 shall govern the Services, except as modified below. To the extent permitted by U.C.C. Articles 3-A and 4, the liability of Financial Institution related to the Services shall in all cases be subject to the provisions of this Agreement, including, without limitation, any provisions hereof that exclude or limit warranties made by, damages payable to or remedies available from Financial Institution.

(b) Wrongful Honor. It shall constitute wrongful honor by Financial Institution if Financial Institution pays an Exception Check listed in a timely Exception Check Report unless: (i) Customer issued a Pay Decision. In the event that there is wrongful honor, the following shall apply:

(i) Financial Institution shall be liable to Customer for the lesser of the amount of the wrongfully paid Exception Check or Customer’s actual damages resulting from Financial Institution’s payment of the Exception Check.

(ii) Financial Institution expressly waives any right it may have to assert that Customer is liable for the amount of the wrongfully honored Exception Check on the grounds that the Exception Check was properly payable under U.C.C. Section 4-401.

(iii) Financial Institution retains the right to assert Customer’s failure to exercise reasonable care under U.C.C. Sections 3-A-1406 and 4-406.

(iv) Financial Institution retains the right to assert the defense that Customer has sustained no actual damages because Financial Institution’s honor of the Exception Check discharged for value an indebtedness of Customer.

(c) Wrongful Dishonor. Except as provided below, it shall constitute wrongful dishonor by Financial Institution if Financial Institution dishonors an Exception Check: (i) that Financial Institution has been ordered to pay pursuant to a Pay Decision.

(i) Financial Institution’s liability for wrongful dishonor of an Exception Check shall be limited to the damages for wrongful dishonor recoverable under U.C.C. Articles 3-A and 4.

(ii) Notwithstanding (c)(i) above, Financial Institution shall have no liability to Customer for wrongful dishonor when Financial Institution, acting in good faith, returns an Exception Check:

(a) that it reasonably believed was not properly payable; or
(b) if there are insufficient Available Funds on deposit in the Authorized Account; or
(c) if required to do so by the service of legal process on Financial Institution or the instructions of regulatory or government authorities or courts.

(d) Rightful Payment and Dishonor. Except as provided below, the following shall apply:

(i) If Financial Institution honors an Exception Check in accordance with a Pay Decision issued by Customer, such honor shall be rightful, and Customer waives any right it may have to assert that the Exception Check was not properly payable under U.C.C. section 4- 401.

(ii) If Financial Institution dishonors an Exception Check in accordance with the Financial Institution’s return default option or in accordance with a Return Decision issued by Customer, the dishonor shall be rightful, and Customer waives any right it may have to assert that the dishonor was wrongful under the U.C.C. section 4-402.

(iii) Customer agrees that Financial Institution exercises ordinary care whenever it rightfully pays or returns an Exception Check consistent with the provisions of this Agreement.

4. Fees and Charges. There are no fees or charges associated with the Service although Financial Institution reserves the right to change this policy and set forth fees and charges after notification is sent to Customer.

5. Security Procedure. As an additional security procedure, Customer must ensure that one Authorized User creates and uploads an Issue File and a different Authorized User reviews and decisions any item(s) on the Exception Check Report. The same procedure applies in the event Customer manually enters a check into the Positive Pay Service.

REVERSE POSITIVE PAY OPTION

This Part applies if Reverse Positive Pay Services (hereinafter the “Services”) are requested by Customer and approved by Financial Institution.

1. Presented Check Record. By 8:00 AM Eastern Time (“ET”) on each Business Day (the “Presented Record Deadline”), Financial Institution will provide or otherwise make available to Customer, through the Financial Institutions Business Online Banking Services’ website (under the Positive Pay link), information regarding the presented checks against the account(s) designated by Customer for this Reverse Positive Pay Service (an “Authorized Account”) the previous Business Day. The Services will show each check presented, along with the serial number and the amount processed through the Federal Reserve.

2. Payment Instructions. Customer must compare the information provided by Financial Institution with Customer’s check or item issuance records. Customer shall notify Financial Institution prior to 11:00 AM ET on the same Business Day (the “Decision Deadline”), via the Business Online Banking Services’ website, of Customer’s decision on any reported presented checks. Customer will indicate affirmatively whether Customer wishes to pay (a “Pay Decision”) or return (a “Return Decision”) each item presented every business day. If Customer wishes to return an item(s), Customer will indicate the specific reason for return. Financial Institution may rely on any instructions and Pay Decisions received from Customer that are made in accordance with the requirements of the Services and the Business Online Banking Services’ website. Financial Institution is authorized to finally pay any presented check listed in the Presented Check Record with a Pay Decision unless Customer instructs Financial Institution to return the check or item prior to the Return Decision Deadline.

3. Payment and Dishonor of Presented Checks. Financial Institution will pay or return presented checks in accordance with Customer’s Decision or will return presented checks as the default setting if Customer does not make a Decision by the 11:00 AM cutoff time each business day.

a) Return Decision- (Default). When Customer provides a Return Decision, Financial Institution shall return to the depositary Financial Institution any presented check drawn on an Authorized Account that Customer directs Financial Institution to return via a Return Decision. Financial Institution is not responsible for detecting any Customer error contained in any Return Decision sent by Customer to Financial Institution. Financial Institution reserves the right to require Customer to place a stop payment order on any check or item that is decisioned to be returned. In the event that Customer does not timely respond to the online Presented Check Record, Financial Institution will return item(s) as previously agreed upon between Customer and Financial Institution. Customer agrees to specify one or more authorized persons who shall be available immediately on all Business Days to respond to Financial Institution inquiries regarding a Presented Check Record.

b) Pay Decision. If Customer provides a Pay Decision to Financial Institution, Financial Institution will finally pay and charge to the Authorized Account, to the extent there are sufficient Available Funds in the Authorized Account, any presented check drawn on that Authorized Account.

4. Checks Presented for Payment at Financial Institution Teller Stations and Items-Converted-to-ACH. The Services are not designed to compare Customer’s list of issued checks against checks that are (a) presented for payment over- the-counter at Financial Institution teller stations (“Teller Cashed Checks”) or (b) converted to an electronic transaction (such as an accounts receivable entry or “ARC”) that will be presented for payment through the Automated Clearing House network (“Items-Converted-to-ACH”). Teller Cashed Checks and Items-Converted- to-ACH are not eligible for Return Decisions and will be processed and paid in accordance with Financial Institution’s standard procedures as set forth in the Account Agreement or as otherwise provided by agreement of the parties or applicable ACH network rules. Teller Cashed Checks may be eligible for return in accordance with Financial Institution’s standard procedures, which may require an affidavit. Checks converted to ACH may be eligible for return if they meet NACHA regulations.

5. Remedies.

a) U.C.C. Liability. To the extent applicable, the liability provisions of U.C.C. Articles 3-A and 4 shall govern the Services, except as modified below. To the extent permitted by U.C.C. Articles 3 and 4, the liability of Financial Institution related to the Services shall in all cases be subject to the provisions of this Agreement, including, without limitation, any provisions thereof that exclude or limit warranties made by, damages payable to or remedies available from Financial Institution.

b) Wrongful Honor. It shall constitute wrongful honor by Financial Institution if Financial Institution pays a presented check for which Customer issued a Return Decision by the Return Decision Deadline set forth in Part 8. In the event that there is wrongful honor, the following shall apply:

i. Financial Institution shall be liable to Customer for the lesser of the amount of the wrongfully paid presented check or Customer’s actual damages resulting from Financial Institution’s payment of the presented check.
ii. Financial Institution expressly waives any right it may have to assert that Customer is liable for the amount of the wrongfully honored presented check on the grounds that the presented check was properly payable under U.C.C. Section 4-401.
iii. Financial Institution retains the right to assert Customer’s failure to exercise reasonable care under U.C.C. Sections 3-A-1406 and 4- 406.
iv. Financial Institution retains the right to assert the defense that Customer has sustained no actual damages because Financial Institution’s honor of the presented check discharged for value an indebtedness of Customer.

c) Wrongful Dishonor. Except as provided below, it shall constitute wrongful dishonor by Financial Institution if Financial Institution dishonors a presented check for which Customer has issued a Pay Decision by the Decision Deadline set forth in this Part 3.

i. Financial Institution’s liability for wrongful dishonor of a presented check shall be limited to the damages for wrongful dishonor recoverable under U.C.C. Articles 3-A and 4.
ii. Notwithstanding (c)(i) above, Financial Institution shall have no liability to Customer for wrongful dishonor when Financial Institution, acting in good faith, returns a presented check:

(a) that it reasonably believed was not properly payable; or
(b) if there are insufficient Available Funds on deposit in the Authorized Account; or
(c) if required to do so by the service of legal process on Financial Institution or the instructions of regulatory or government authorities or courts.

d) Rightful Payment and Dishonor. Except as provided below, the following shall apply:

i. If Financial Institution honors a presented check in accordance with the Pay Decision described above, such honor shall be rightful, and Customer waives any right it may have to assert that the presented check was not properly payable under U.C.C. section 4-401.
ii. If Financial Institution dishonors a presented check in accordance with the Financial Institution’s return default option, or a Return Decision issued by Customer the dishonor shall be rightful, and Customer waives any right it may have to assert that the dishonor was wrongful under the U.C.C. section 4-402.
iii. Customer agrees that Financial Institution exercises ordinary care whenever it rightfully pays or returns a presented check consistent with the provisions of this Agreement.

6. Information Regarding Presented Checks. Customer shall notify Financial Institution by the Presented File Deadline set forth in Section 6 if the information regarding presented checks is not available under the Positive Pay link of the Business Online Banking website by the Paid Record Deadline. Financial Institution will make reasonable efforts to make the information about presented checks available to Customer and honor Customer’s instructions. Financial Institution’s failure to provide the information about presented checks will not discharge Customer’s obligation with regard to any check that was otherwise properly payable at the time of presentment.

7. Assignment. To the extent that Customer suffers a loss under this Part, Financial Institution assigns to Customer any claim that Financial Institution would have against a depositary or collecting Financial Institution to recover the loss, including any claim of breach of warranty under U.C.C. Sections 4-207, 4-208, and 4-209.

8. Fees and Charges. There are no fees or charges associated with the Service although Financial Institution reserves the right to change this policy and set forth fees and charges after notification is sent to Customer.

9. Security Procedure. As an additional security procedure, Customer must ensure that one Authorized User compares the information about presented checks provided by Financial Institution against checks issued and a different Authorized User reviews and notifies Financial Institution of its Decision to Pay or Return before the Decision Deadline.

ACH POSITIVE PAY OPTION

This applies if the ACH Alerts Service (hereinafter the “Service”) is requested by Customer and approved by Financial Institution.

1. ACH Positive Pay – Service

a. Definitions.

“Authorized Account” in this Part means the Account(s) of Customer maintained at Financial Institution to which the Service rendered by Financial Institution will apply.

“Alert” in this Part means the notification(s) Customer receives related to the Service, which may be a default notification or based on the notification criteria Customer elects within the Service’s portal.

“Exception Entry” means an ACH Debit Entry that is filtered as elected by Customer through the Service.

“Pay Decision” means the instructions of Customer to Financial Institution provided via the Service’s portal requesting Financial Institution to pay/post an Exception Entry.

“Pay Default Disposition” means a default disposition that Customer may elect whereby all Exception Entries that do not meet Customer’s ACH filter instructions (as described in this Part) are debited from Customer’s Authorized Account if Customer does not override the default disposition via the Service’s portal by the 11:00 AM deadline on a Business Day.

“Return Decision” means the instructions of Customer to Financial Institution via the Service’s portal instructing Financial Institution to return an Exception Entry.

“Return Default Disposition” means a default disposition that Customer may elect whereby all Exception Entries that do not meet Customer’s ACH filter instructions (as described in this Part) are automatically scheduled to be returned to the Originator of the ACH Debit Entry if Customer does not override the default disposition via the Service’s portal prior to the 11:00 AM deadline on a Business Day.

2. Service.

The Service described in this Part allows Customer to elect how Financial Institution will handle ACH Debit Entries (as that term is defined in the ACH Rules) presented to Customer’s Authorized Account(s). Using the Service, Customer may “filter” all incoming ACH Debit Entries and provide instructions via the Service’s portal instructing Financial Institution to authorize only those Entries that meet a set of pre-determined rules created by Customer within the Services’ portal (the “Filter Rules”), each as further described below.

Customer acknowledges that the Service has been identified by Financial Institution as a service that can reduce the risk of fraudulent ACH Debit Entries being posted against Customer’s Authorized Account(s) when such Service is adopted and properly utilized by Customer. By conforming to the terms and conditions of this Part, Customer acknowledges and agrees that it may significantly reduce the chance that fraudulent ACH Debit Entries will be debited from Customer’s Authorized Account(s) by electronically matching incoming ACH Debit Entries to Customer’s filter instructions.

By utilizing the ACH filter feature, Customer instructs Financial Institution to filter all incoming ACH Debit Entries presented to Customer’s Authorized Account(s) to Customer, in accordance with the Filter Rules. Such ACH Debit Entries will be presented to Customer for review as Exception Entries and Customer will be notified via Alert of Exception Entries. The Financial Institution’s Default Disposition will apply to an ACH Debit Entry unless Customer overrides the return default by the 11:00 AM deadline.

As part of the “Filter Election” described above, upon review of any Exception Entry, Customer may utilize the “approved list” feature available via the Service’s portal to change its existing filter election to expressly permit any future incoming ACH Debit Entry based on a company identification. Once on the “approved list,” all subsequent incoming ACH Debit Entries from that company identification will be automatically paid/posted as presented to Financial Institution if they are within any restrictions placed on the “approved list” by Customer.

3. Payment and Dishonor of Exception Entries.

Return Default Disposition.

Customer may choose to override the Return Default Disposition of individual Exception Entries presented via the Services by providing a Pay Decision to Financial Institution by the 11:00 AM deadline, in which case such Exception Entries will be debited from Customer’s Authorized Account(s) on the Settlement Date. If Customer does not override the Return Default Decision before the 11:00 AM deadline, the ACH Debit Entry will be automatically returned.

4. Customer and Financial Institution Communications.

This Part and any instructions submitted by Customer via the Service’s portal and in compliance with the requirements of the Business Online Banking Service are Financial Institution’s record of Customer’s ACH filter request and represent Financial Institution’s understanding of Customer’s request. If the information that Customer has provided via the Service’s portal is incorrect in any category, Customer must correct the information via the Service’s portal immediately, as Financial Institution is NOT responsible for filtering ACH Debit Entries unless they are accurately described as set forth in this Part or via the Service’s portal.

Financial Institution is not responsible for detecting any Customer error contained in any ACH Debit Entries presented, decisioned, returned or processed, or in any Pay Decision or Return Decision by Customer.

In the event that Financial Institution or its service provider is unable to notify Customer of Exception Entries via an Alert, the Financial Institution’s Default Disposition shall apply.

Customer’s ACH filter instruction(s) will be accepted subject to the condition that ACH Debit Entries have not already been posted or are not otherwise in the process of posting, and that Financial Institution will have a reasonable opportunity to act on Customer’s request before any such processing.

Financial Institution shall have a reasonable time after receipt of Customer’s request to implement the Service and shall not assume responsibility for stopping ACH Debit Entries that have already been posted to Customer’s Account(s).

5. Remedies.

a) Financial Institution Liability. To the extent permitted by applicable law, the liability of Financial Institution under this Part shall in all cases be subject to the provisions of the Agreement, including, without limitation, any provisions thereof that exclude or limit warranties made by, damages payable by or remedies available from Financial Institution.

b) Wrongful Payment/Posting. It shall constitute wrongful payment/posting by Financial Institution if Financial Institution pays/posts an Exception Entry that is subject to filter instruction and for which Customer has provided a Return Decision by the 11:00 AM deadline. In the event that there is wrongful payment/posting, Financial Institution shall be liable to Customer for the lesser of the amount of the wrongfully paid/posted Exception Entry or Customer’s actual damages resulting from Financial Institution’s posting of the Exception Entry, subject to the terms of the Agreement.

c) Rightful Payment and Return. If Financial Institution honors an Exception Entry in accordance with a Pay Decision by Customer as described above, such payment/posting shall be rightful, and Customer waives any right it may have to assert otherwise.

If Financial Institution returns an Exception Entry in accordance with a Return Decision by Customer as described above, or otherwise pursuant to the Financial Institution’s Return DefaultDisposition as described in this Part, the return shall be rightful, and Customer waives any right it may have to assert otherwise.

Customer agrees that Financial Institution exercises ordinary care whenever it rightfully pays/posts or returns an Exception Entry consistent with the provisions of this Part.

6. Other Terms of the Service.

Customer acknowledges that the Service does not preclude Financial Institution’s standard ACH processing procedures, which may cause an ACH Debit Entry to be dishonored even if Customer’s instructions do not otherwise require Financial Institution to return such ACH Debit Entry.

Customer acknowledges that the Service does not apply to transactions between Customer and Financial Institution, including any Financial Institution affiliates and subsidiaries, such as loan or credit card payments (“Financial Institution-Related Entries”). Financial Institution is permitted to pay Financial Institution-Related Entries whether or not Customer has included these in Customer’s ACH filter elections as reflected in this Part and until such time as Customer’s election with respect to the underlying Financial Institution-Related Entries is revoked or otherwise terminated.

Customer acknowledges that the Service is intended to be used to identify and return ACH Debit Entries which Customer suspects in good faith are fraudulent or otherwise unwarranted. The Service is NOT intended to be a substitute for authorization instructions or to delay Customer’s decision on ACH Debit Entries, including but not limited to stop payment orders on ACH Debit Entries which are not suspected in good faith to be unauthorized. If Financial Institution suspects or deems, in Financial Institution’s sole discretion, that Customer is using the Service contrary to those intentions, Financial Institution may require Customer to provide evidence that ACH Debit Entries that Financial Institution returns pursuant to Customer’s instructions were in fact unauthorized. In addition, Financial Institution may hold Customer liable for losses that Financial Institution sustains on ACH Debit Entries which Financial Institution is requested to return under the Service and which Customer does not reasonably establish as unauthorized ACH Debit Entries, including as under the ACH Rules.

7. Indemnification.

You agree to defend, indemnify, and hold harmless Bank and its subsidiaries, affiliated companies, employees, contractors, officers, directors, and assigns against any and all claims, suits, damages, costs, lawsuits, fines, penalties, liabilities, and expenses (including, without limitation, reasonable attorneys’ fees) that arise from your use of the Account, your acts or omissions, or your violation of this Agreement, Applicable Law, or any third-party rights or your fraud or willful misconduct. Bank reserves the right to assume the exclusive defense and control of any matter subject to indemnification by you, in which event you will cooperate in asserting any available defense.

Choice of Product:

  • CHECK POSITIVE PAY                 Yes ________    No ________
    • Standard Positive Pay                 ________
    • Reverse Positive Pay                   ________
  • ACH DEBIT POSITIVE PAY        Yes ________    No ________

Accounts Included in Agreement:

Primary Account:
Account 2:
Account 3:
Account 4:
Account 5:
Account 6:
Account 7:
Account 8:
Account 9:
Account 10:

IN WITNESS WHEREOF, each of Financial Institution and Customer has caused this Agreement to be executed as a document under seal and in their names and on their behalf by their duly authorized representatives, effective as of the date on which the Financial Institution executes this Agreement.

 

The Bank of Glen Burnie  

 

By: ____________________________________

Name:

Title:

Date:

Customer

______________________________________

By:___________________________________

Name:

Title:

Date:

 Revised 10/2024