KRS 355.4-401: When bank may charge customer's account.

(1) 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.

(2) A customer is not liable for the amount of an overdraft if the customer neither

signed the item nor benefited from the proceeds of the item.

(3) 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 KRS 355.4-403(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 KRS 355.4 -

303. If a bank char ges 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 KRS 355.4-402.

(4) A b ank that in good faith makes payment to a holder may charge the indicated

account of its customer according to:

(a) The original terms of the altered item; or

(b) 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.