N.Y. Uniform Commercial Code Law § 4-301: Deferred Posting; Recovery of Payment by Return of Items; Time of Dishonor

Section 4--301. Deferred Posting; Recovery of Payment by Return of

Items; Time of Dishonor.

(1) Where an authorized settlement for a demand item (other than a

documentary draft) received by a payor bank otherwise than for immediate

payment over the counter has been made before midnight of the banking

day of receipt the payor bank may revoke the settlement and recover any

payment if before it has made final payment (subsection (1) of Section

4--213) and before its midnight deadline it

(a) returns the item; or

(b) sends written notice of dishonor or nonpayment if the item is

held for protest or is otherwise unavailable for return.

(2) If a demand item is received by a payor bank for credit on its

books it may return such item or send notice of dishonor and may revoke

any credit given or recover the amount thereof withdrawn by its

customer, if it acts within the time limit and in the manner specified

in the preceding subsection.

(3) 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 this section.

(4) An item is returned:

(a) as to an item received 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; or

(b) in all other cases, when it is sent or delivered to the

bank's customer or transferor or pursuant to his

instructions.