(a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge-back the amount of any credit given for the item to its customer's account, or obtain refund from its customer, whether or not it is able to return the item, if, by its midnight deadline or within a longer reasonable time after it learns the facts, it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer, but it is liable for any loss resulting from the delay.
These rights to revoke, charge back, and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final.
A collecting bank returns an item when it is sent or delivered to the bank's customeror transferor or pursuant to its instructions.
A depositary bank that is also the payor may charge back the amount of an item to itscustomer's account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (section 4-4-301).
The right to charge back is not affected by:
Previous use of a credit given for the item; or
Failure by any bank to exercise ordinary care with respect to the item, but a bank sofailing remains liable.
A failure to charge back or claim refund does not affect other rights of the bankagainst the customer or any other party.
If credit is given in dollars as the equivalent of the value of an item payable in aforeign money, the dollar amount of any charge-back or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.
Source: L. 94: Entire article amended with relocations, p. 894, § 2, effective January 1, 1995.
Editor's note: This section is similar to former § 4-4-212 as it existed prior to 1994, and the former § 4-4-214 was relocated to § 4-4-216.