ABA Backs Fla. Bank in Wire Transfer Suit

The American Bankers Association on Wednesday urged a Florida state appeals court to absolve a U.S. bank of liability for trouble with an international wire transfer.

The ABA said Miami-based Ocean Bank acted appropriately when it ignored some minor errors in a wire transfer and credited it to the correct party.

"Although the bank receiving that transfer has the right to reject the funds due to minor discrepancies, so long as the bank can assure crediting the proper party, it is desirable that a bank also have the right to allow that transfer to proceed," wrote Thomas J. Greco, the ABA's associate general counsel.

Corfan Banco Asuncion Paraguay, not realizing that the U.S. bank properly credited the transfer, re-sent the funds with all the correct account data. It then asked Ocean Bank to return the initial transfer, but the customer withdrew the funds before the U.S. bank could comply.

The Paraguay bank sued, charging Ocean Bank violated the Uniform Commercial Code by accepting the first transfer. A lower court sided with Ocean Bank.