Also known as: statements of account · statement of accounts · account statement · SOA
Written by attorneys — see sources below.
A record stating the aggregate amount of unpaid obligations secured by collateral as of a specified date. A debtor may send a signed request asking the secured party to approve or correct the record when the request reasonably identifies the underlying transaction.
Simon Stern sent Summit Bank a signed record listing the vessels securing his loan and stating the unpaid balance he believed remained. Summit Bank replied with a signed letter that approved the vessel list but corrected the balance figure. The response satisfied the duty because it was a signed approval or correction sent back to the debtor.
Sydney Santos received a monthly statement of account from Sierra Solutions showing several wire transfers. She did not review the statement for unauthorized activity until weeks later. The statement supplied the notice that started the clock for her duty to report discrepancies to the bank.
Tomaz Mendes Regatos, a Brazilian citizen, opened a deposit account with Commercial Bank of New York on July 11, 1997, in his own name and the names of his wife and daughter. He signed the Account Agreement on the bottom of each page. The agreement stated that the bank would send quarterly statements. The depositor must notify the bank in writing of any irregularity no more than fifteen calendar days after the statement was first mailed or made available. Regatos had a conversation with bank director Joao Almada in which Almada told him that statements for Brazilian customers would be retained and provided only upon request. Regatos never signed the separate Account Information form authorizing a hold-mail arrangement. He requested and received bank extracts monthly in 1997 and as needed in later years, including two or three times in 2001 before August. For wire transfers out of the New York account, Regatos used a procedure he instituted: he signed and faxed a payment order to the Sao Paulo representative office, followed by a telephone confirmation call with employee Abadi, after which she countersigned and forwarded the order to New York for signature verification against the card on file. Abadi confirmed in her affidavit that the Sao Paulo office followed this practice of requiring telephonic confirmation before forwarding any payment order from Regatos. On March 23, 2001, $450,000 was wired from Regatos's account to Citibank New York, and on April 6, 2001, another $150,000 was wired to the same institution. Regatos states that he neither initiated nor authorized either transfer, that the Sao Paulo office never called him to confirm those orders, and that he would not have approved them if contacted. Regatos first obtained actual notice of the transfers on August 9, 2001, when he requested his account statement, and he notified the bank of his objections the same day. North Fork Bank, as successor-in-interest to Commercial Bank of New York, moved for summary judgment in the United States District Court for the Southern District of New York under Federal Rule of Civil Procedure 56, contending that Regatos was estopped from seeking reimbursement because he failed to object within fifteen days of the statements becoming available.
View caseThe secured party must sign and send the debtor an approval or correction of the statement within fourteen days after receipt. The response must be a signed record that either confirms the debtor's figures or supplies corrected information about the unpaid secured obligations.
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No. The statute requires the secured party to sign and send an approval or correction directly to the debtor. Internal inspection or oral confirmation does not meet the signed-record requirement.
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The secured party violates its statutory duty. The debtor may then pursue remedies available under Article 9 for the noncompliance.
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Yes. The response must provide current information about the unpaid obligations. Sending an outdated statement without updating it for intervening payments fails to satisfy the duty.
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