Iowa Code

Iowa Code § 554.4301 (2026)

Deferred posting — recovery of payment by return of items — time of dishonor — return of items by payor bank

✓ current as of July 2026

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1. If a payor settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the payment settlement if, before it has made final payment and before its midnight deadline, it

a. returns the item; or

b. sends written notice of dishonor or nonpayment if the item is unavailable for return; and the item or notice includes the reason for dishonor or nonpayment.

2. If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection 1.

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 presented 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 clearing-house rules; or

b. in all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to that customer’s or transferor’s instructions. [C66, 71, 73, 75, 77, 79, 81, §554.4301] 94 Acts, ch 1167, §104, 122 Referred to in §554.3502, 554.4214 \n

Notes of Decisions

Cited in 4 cases, 1990–2016 · leading case: Sarachek v. Luana Sav. Bank, 547 B.R. 292 (N.D. Iowa 2016).

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Sarachek v. Luana Sav. Bank, 547 B.R. 292 (N.D. Iowa 2016). “§ 4-301(a) (allowing banks to utilize a deferred posting procedure); see also Iowa Code § 554.4301 (1) (allowing banks in Iowa to utilize a deferred posting procedure).”

Alta Vista State Bank v. Linda Kobliska, First Nat'l Bank of Minneapolis, D/B/A First Bank, Minneapolis, 897 F.2d 930 (1st Cir. 1990). “See Iowa Code § 554.4301 (1985). Alta Vista initially filed this suit against First Bank Minneapolis in state court alleging that, as a result of First Bank Minneapolis’s failure to inform Alta Vista on August 5, 1986, of its suspicions that Andersen’s was kiting checks, Alta…”

Sarachek v. Luana Sav. Bank (In re Agriprocessors, Inc.), 490 B.R. 852 (Bankr. D. Iowa 2013). “” Iowa Code § 554.4301 (l)(a) (emphasis added).”

Nat'l Bank v. FCC Equip. Fin., Inc., 801 N.W.2d 17 (Iowa Ct. App. 2011). “See Iowa Code § 554.4301 (2007) (allowing the payor bank to recover payment of a demand item by returning the item or sending written notice of dishonor before the midnight deadline).”

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