N.Y. Banking Law § 680-f: Payment to beneficiary by bank

§ 680-f. Payment to beneficiary by bank. 1. Unless the account

agreement provides otherwise, the bank is obligated to pay a beneficiary

if there are sufficient actually and finally collected funds in the

balance of the special deposit.

2. Except as provided in subdivision three of this section, the

obligation to pay the beneficiary is excused if the funds available in

the special deposit are insufficient to cover such payment.

3. Unless the account agreement provides otherwise, if the funds

available in the special deposit are insufficient to cover an obligation

to pay a beneficiary, a beneficiary may elect to be paid the funds that

are available or, if there is more than one beneficiary, a pro rata

share of the funds available. Payment to the beneficiary making the

election under this subsection discharges the bank's obligation to pay a

beneficiary and does not constitute an accord and satisfaction with

respect to another person obligated to the beneficiary.

4. Unless the account agreement provides otherwise, the obligation of

the bank obligated to pay a beneficiary is immediately due and payable.

5. The bank may discharge its obligation under this section by:

(a) crediting another transaction account of the beneficiary; or

(b) taking other action that:

(i) is permitted under the account agreement for the bank to obtain a

discharge; or

(ii) otherwise would constitute a discharge under law.

6. If the bank obligated to pay a beneficiary has incurred an

obligation to discharge the obligation of another person, the obligation

of the other person is discharged if action by the bank under

subdivision five of this section would constitute a discharge of the

obligation of the other person under law that determines whether an

obligation is satisfied.