The state legislature in Michigan acted this week to remedy a gap in applicable law for certain areas of remittance transfers that was created by provisions of the Dodd-Frank Wall Street Reform Act. The effect of Dodd-Frank Section 1073 was to disrupt the balanced delineation of what was covered as an EFT and what was governed by UCC4A as a wire transfer. Section 1073 placed consumer initiated international wire transfers under coverage of EFTA, as remittance transfers, thereby taking all bank to bank transfers supporting a consumer wire out from under UCC4A coverage. This unexpected lack of coverage by UCC4A impacts the agreements in place among financial institutions.
From the ABA
Michigan Introduces UCC4A Remittance Transfer Fix
This week Michigan became the latest state to propose amendments to UCC Article 4A, Section 108 to resolve what otherwise would be a gap in applicable law for aspects of remittance transfers that was created by a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Michigan Senate Bill 550 was introduced on September 25, 2013. The 2012 amendments to UCC4A-108 have been enacted in 38 states and the District of Columbia. Amendments were considered but not enacted in Connecticut and North Dakota in 2013. Nine states have yet to introduce the amendments: Delaware, Florida, Kansas, Louisiana, Maryland, Oklahoma, Utah, Vermont and Wyoming.