Iowa Code

Iowa Code § 554.3404 (2026)

Impostors — fictitious payees

✓ current as of July 2026

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1. If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an endorsement of the instrument by any person in the name of the payee is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

2. If a person whose intent determines to whom an instrument is payable (section 554.3110, subsection 1 or 2) does not intend the person identified as payee to have any interest in the instrument, or the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special endorsement:

a. Any person in possession of the instrument is its holder.

b. An endorsement by any person in the name of the payee stated in the instrument is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

3. Under subsection 1 or 2, an endorsement is made in the name of a payee if it is made in a name substantially similar to that of the payee or the instrument, whether or not endorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee.

4. With respect to an instrument to which subsection 1 or 2 applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss. 94 Acts, ch 1167, §51, 121, 122; 2013 Acts, ch 30, §261 Referred to in §554.3417, 554.4208\n\nTue Dec 09 22:02:40 2025 Iowa Code 2026, Chapter 554 (108, 4) §554.3405, UNIFORM COMMERCIAL CODE 72 \n

Notes of Decisions

Cited in 3 cases, 1988–1992 · leading case: Husker News Co. v. South Ottumwa Sav. Bank, 482 N.W.2d 404 (Iowa 1992).

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Husker News Co. v. South Ottumwa Sav. Bank, 482 N.W.2d 404 (Iowa 1992). · cites it 2× “The trial court did not react to the banks’ first response; it made no finding regarding whether Husker’s negligence precluded Husker from asserting that Hopf’s signatures were unauthorized under Iowa Code section 554.3404(1). We also pass the banks’ first response and rely…”

Am. Trust & Sav. Bank v. United States Fid. & Guar. Co., 418 N.W.2d 853 (Iowa 1988). · cites it 2× “The bank maintains that Pape is liable to the bank for the face amount of the twelve outstanding notes, see Iowa Code § 554.3404 (1) (one who signs name of another, without authorization, is liable on note).”

Am. Tr. & Sav. v. Fid. & Guar., 418 N.W.2d 853 (Iowa 1988). · cites it 2× “The bank maintains that Pape is liable to the bank for the face amount of the twelve outstanding notes, see Iowa Code § 554.3404 (1) (one who signs name of another, without authorization, is liable on note).”

— Iowa Code § 554.3404(1) — 1 case

Husker News Co. v. South Ottumwa Sav. Bank, 482 N.W.2d 404 (Iowa 1992). “The trial court did not react to the banks’ first response; it made no finding regarding whether Husker’s negligence precluded Husker from asserting that Hopf’s signatures were unauthorized under Iowa Code section 554.3404(1). We also pass the banks’ first response and rely…”

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