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Can you summarize ALCA 7-4-301?
Collection of Items: Payor Banks. > Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank.
Short Summary
This provision, found in the Code of Alabama under the Commercial Code section on Bank Deposits and Collections, pertains to payor banks and their actions regarding the settlement and recovery of demand items. If a payor bank settles for a demand item other than a documentary draft presented for immediate payment before midnight of the banking day of receipt, it has the option to revoke the settlement and recover the settlement amount. This can be done by returning the item or sending written notice of dishonor or nonpayment if the item is unavailable for return. If a demand item is received by a payor bank for credit on its books, it may also return the item or send notice of dishonor within the specified time limit. An item is considered dishonored when it is returned or notice is sent in accordance with this provision. The specific methods of returning an item depend on whether it was presented through a clearing house or not. This provision outlines the actions and timelines for payor banks in relation to the handling of demand items.
Whom does it apply to?
Payor banks
What does it govern?
Collection of Items: Payor Banks
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Alabama