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Arkansas Code Annotated

Ark. Code Ann. § 4-4-213 (2020)

Medium and time of settlement by bank

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  1. With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearinghouse rules, and the like, or agreement. In the absence of such prescription:
    1. the medium of settlement is cash or credit to an account in a Federal Reserve bank of or specified by the person to receive settlement; and
    2. 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 § 4-4A-406(a) to the person receiving settlement.
  2. If the tender of settlement is not by a medium authorized by subsection (a) or the time of settlement is not fixed by subsection (a), 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:
    1. presents or forwards the check for collection, settlement is final when the check is finally paid; or
    2. 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.

History. Acts 1961, No. 185, § 4-211; A.S.A. 1947, § 85-4-211; Acts 1991, No. 572, § 6.

A.C.R.C. Notes. This section was formerly codified as § 4-4-211. Former § 4-4-213 has been renumbered as § 4-4-215.

Case Notes

Cashier's Check.

Where an Arkansas bank presented to an Oklahoma bank a check drawn on Oklahoma bank, payable to debtor of Arkansas bank who had presented it in payment of an antecedent debt, and Oklahoma bank accepted the check and gave a cashier's check in exchange, payable to the Arkansas bank, the Arkansas bank was entitled to recover on the cashier's check, although it had been dishonored by Oklahoma bank on discovery that the check drawn on it was forged. Citizens Bank v. National Bank of Commerce, 334 F.2d 257 (10th Cir. 1964).

Charge-Back.

There is a cause of action by the customer against a collecting bank when the collecting bank makes a charge-back for an item after it has received final settlement. Gordon v. Planters & Merchants Bancshares, Inc., 310 Ark. 11, 832 S.W.2d 492 (1992).

Notes of Decisions
Cited in 2 cases, 1992–1996 · leading case: Gordon v. Planters & Merchants Bancshares, Inc., 935 S.W.2d 544 (Ark. 1996).
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Gordon v. Planters & Merchants Bancshares, Inc., 935 S.W.2d 544 (Ark. 1996). · cites it 12× “Gordon alleged that Planters violated Ark.Code Ann. § 4-4-213 (1987) and acted maliciously, intentionally, and in bad faith; he sued for the amount of the check, plus interest and punitive damages.”
Gordon v. Planters & Merchants Bancshares, Inc., 832 S.W.2d 492 (Ark. 1992). · cites it 9× “This is an appeal from the granting of a 12(b)(6) motion and requires construction of a provision of Article Four of the Uniform Commercial Code — Ark. Code Ann. § 4-4-213 (1987). The complaint alleges that on September 24, 1990, Ashel Gordon (plaintiff/appellant), deposited a…”
Ark. Code Ann. § 4-4-213(2): 1 case
Gordon v. Planters & Merchants Bancshares, Inc., 832 S.W.2d 492 (Ark. 1992). “This is an appeal from the granting of a 12(b)(6) motion and requires construction of a provision of Article Four of the Uniform Commercial Code — Ark. Code Ann. § 4-4-213 (1987). The complaint alleges that on September 24, 1990, Ashel Gordon (plaintiff/appellant), deposited a…”
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