Bank Deposits and Collections

ORS 74.4010
When bank may charge customer’s account


A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.


A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefits from the proceeds of the item.


A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in ORS 74.4030 (Customer’s right to stop payment) (2) for stop payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in ORS 74.3030 (When items subject to notice, stop payment order, legal process or setoff). If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under ORS 74.4020 (Bank’s liability to customer for wrongful dishonor).


A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to:


The original terms of the altered item; or


The terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper. [1961 c.726 §74.4010 (When bank may charge customer’s account); 1993 c.545 §104]


Last accessed
Jun. 26, 2021