First National Bank of Chicago v. Standard Bank & Trust

First National Bank of Chicago, known at the time relevant to this suit as NBD Bank ("NBD"), brought an action for declaratory judgment alleging that Standard Bank & Trust ("Standard Bank" or "Standard") failed to return certain checks to NBD in a timely fashion under the Expedited Funds Availability Act, 12 U.S.C. sec. 4010(d) & (f) ("EFAA"). Finding that the checks were returned in a timely fashion, the district court granted summary judgment to the defendant Standard Bank, and awarded it prejudgment interest on the returned checks. Standard claimed it was entitled to the average prime rate for the relevant time period. However, the district court used the three-month Treasury Bill rate--4.9241%--compounded quarterly. Both sides appeal. For the reasons set out below, we affirm the district courts decision that the checks were properly returned, but vacate the award of interest, and remand for entry of the proper measure of prejudgment interest.