Tennessee Code Annotated
Tenn. Code Ann. § 47-4-213 (2026)
Medium and time of settlement by bank
✓ current as of May 2026
- (a) 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:
- (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:
- (i) 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;
- (ii) with respect to tender of settlement by credit in an account in a Federal Reserve Bank, when the credit is made;
- (iii) 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
- (iv) with respect to tender of settlement by a funds transfer, when payment is made pursuant to § 47-4A-406(a) to the person receiving settlement.
- (b) 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.
- (c) 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 twelve o'clock midnight (12:00 midnight) deadline of the person receiving settlement.
- (d) 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.
Acts 1995, ch. 397, § 3.
Notes of Decisions
Cited in 4
cases, 1973–1989 · leading case: Hobson v. First State Bank, 777 S.W.2d 24 (Tenn. Ct. App. 1989).
Hobson v. First State Bank, 777 S.W.2d 24 (Tenn. Ct. App. 1989). “The trial judge’s order granting partial summary judgment for Plaintiffs makes the basis for his ruling quite clear: The Court has concluded that no genuine material issue of fact exists but that the Defendant Bank completed the process of posting pursuant to Section 47-4-213,…”
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “T.C.A. § 47-4-213(3). A debtor-creditor relationship replaces the agency relationship, and the bank is accountable to the customer for the amount of the item.”
Yeiser v. Bank of Adamsville, 614 S.W.2d 338 (Tenn. 1981). “— (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…”
Smallman v. Home Fed. Sav. Bank of Tennessee, 786 S.W.2d 954 (Tenn. Ct. App. 1989). “These rights to revoke, charge-back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final (subsection (3) of § 47-4-211 and subsections (2) and (3) of § 47-4-213). [5] 47-3-414. Contract of endorser Order of liability.”
— Tenn. Code Ann. § 47-4-213(1) — 1 case
Hobson v. First State Bank, 777 S.W.2d 24 (Tenn. Ct. App. 1989). “The trial judge’s order granting partial summary judgment for Plaintiffs makes the basis for his ruling quite clear: The Court has concluded that no genuine material issue of fact exists but that the Defendant Bank completed the process of posting pursuant to Section 47-4-213,…”
— Tenn. Code Ann. § 47-4-213(3) — 1 case
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “T.C.A. § 47-4-213(3). A debtor-creditor relationship replaces the agency relationship, and the bank is accountable to the customer for the amount of the item.”
— Tenn. Code Ann. § 47-4-213(l)(c) — 1 case
Hobson v. First State Bank, 777 S.W.2d 24 (Tenn. Ct. App. 1989). “The trial judge’s order granting partial summary judgment for Plaintiffs makes the basis for his ruling quite clear: The Court has concluded that no genuine material issue of fact exists but that the Defendant Bank completed the process of posting pursuant to Section 47-4-213,…”
— Tenn. Code Ann. § 47-4-213(l)(d) — 1 case
Hobson v. First State Bank, 777 S.W.2d 24 (Tenn. Ct. App. 1989). “The trial judge’s order granting partial summary judgment for Plaintiffs makes the basis for his ruling quite clear: The Court has concluded that no genuine material issue of fact exists but that the Defendant Bank completed the process of posting pursuant to Section 47-4-213,…”
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