Code of Alabama

Ala. Code § 7-4A-201 (2026)

Security Procedure.

✓ official Alabama Legislature (ALISON) text, current July 2026

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“Security procedure” means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or (ii) detecting error in the transmission or the content of the payment order or communication. A security procedure may impose an obligation on the receiving bank or the customer and may require the use of algorithms or other codes, identifying words, numbers, symbols, sounds, biometrics, encryption, callback procedures, or similar security devices. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer or requiring a payment order to be sent from a known email address, IP address, or telephone number is not by itself a security procedure.

(Acts 1992, 2nd Ex. Sess., No. 92-701, p. 145, §1; Act 2023-492, §1.)

Notes of Decisions

Cited in 3 cases (1 in the last 5 years), 2010–2021 · leading case: Southland Health Servs., Inc. v. Bank of Vernon, 887 F. Supp. 2d 1158 (N.D. Ala. 2012).

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Southland Health Servs., Inc. v. Bank of Vernon, 887 F. Supp. 2d 1158 (N.D. Ala. 2012). · cites it 4× “Count Seven: Ala.Code § 7-4A-201 et seq. Article 4A of the UCC governs funds transfers.”

Brannon v. BankTrust, Inc., 50 So. 3d 397 (Ala. 2010). “She also argued that any evidence indicating that Brannon may have owed money to Hand Arendall was not relevant, she said, because the transfer was an “unauthorized transfer,” and Article 4A of the UCC (§ 7-4A-201 et seq., Ala.Code 1975) provides defenses for such transfers only…”

J.L. Lane Lending, LLC v. Wells Fargo Bank Nat'l Ass'n (M.D. Ala. 2021). · cites it 3× “CODE § 7-4A-201 (27). Bearing mind these statutory provisions, the Court now turns to each of the Plaintiff’s claims.”

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