KRS 355.4-213: Medium and time of settlement by bank.

(1) With respect to settlement by a bank, the medium and time of settlement may be

prescribed by Federal Reserve regulations or circulars, clearing-house rules, and the

like, or agreement. In the absence of such prescription:

(a) The medium of settlement is ca sh or credit to an account in a Federal Reserve

bank of or specified by the person to receive settlement; and

(b) The time of settlement, is:

1. With respect to tender of settlement by cash, a cashier's check, or teller's

check, when the cash or check is sent or delivered;

2. With respect to tender of settlement by credit in an account in a Federal

Reserve bank, when the credit is made;

3. With respect to tender of settlement by a credit or debit to an account in

a bank, when the credit or debit is made or, in the case of tender of

settlement by authority to charge an account, when the authority is sent

or delivered; or

4. With respect to tender of settlement by a funds transfer, when payment

is made pursuant to KRS 355.4A -406(1) to the person receiving

settlement.

(2) If the tender of settlement is not by a medium authorized by subsection (1) of this

section or the time of settlement is not fixed by subsection (1) of this section, no

settlement occurs until the tender of settlement is accepted by the person receiving

settlement.

(3) If settlement for an item is made by cashier's check or teller's check and the person

receiving settlement, before its midnight deadline:

(a) Presents or forwards the check for collection, settlement is final when the

check is finally paid; or

(b) Fails to present or forward the check for collection, settlement is final at the

midnight deadline of the person receiving settlement.

(4) If settlement for an item is made by giving authority to charge the account of the

bank giving settlement in the bank receiving settlement, settlement is final when the

charge is made by the bank receiving settlement if there are funds available in the

account for the amount of the item.