(A) If a payor bank settles for a demand item other than a documentary draft presented
otherwise than for immediate payment over the counter before midnight of the banking
day of receipt, the payor bank may revoke the settlement and recover the settlement
if before it has made final payment and before its midnight deadline it does any of
(1) It returns the item.
(2) It returns an image of the item, if the party to which the return is made has
entered into an agreement to accept an image as a return of the item and the image
is returned in accordance with that agreement.
(3) It sends a record providing notice of dishonor or nonpayment if the item is unavailable
(B) If a demand item is received by a payor bank for credit on its books, it may return
the item or send notice of dishonor and may revoke any credit given or recover the
amount of any credit withdrawn by its customer, if it acts within the time limit and
in the manner specified in division (A) of this section.
(C) Unless previous notice of dishonor has been sent, an item is dishonored at the
time when for purposes of dishonor it is returned or notice sent in accordance with
(D) An item is returned at either of the following times:
(1) As to an item presented through a clearing house, when it is delivered to the
presenting or last collecting bank or to the clearing house or is sent or delivered
in accordance with its rules;
(2) In all other cases, when it is sent or delivered to the bank's customer or transferor
or pursuant to the customer's or transferor's instructions.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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