1. Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank’s right or duty to pay an item or to charge its customer’s account for the item if the knowledge, notice, stop-payment order, or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:

 a. the bank accepts or certifies the item;
 b. the bank pays the item in cash;
 c. the bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;
 d. the bank becomes accountable for the amount of the item under section 554.4302 dealing with the payor bank’s responsibility for late return of items; or
 e. with respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.

Terms Used In Iowa Code 554.4303

  • Account: means the same as defined in section 554. See Iowa Code 554E.1
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Rule: includes "regulation". See Iowa Code 4.1
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Statute: A law passed by a legislature.
 2. Subject to subsection 1 items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.
  Previous section
Next section  
 Chapter 554 Contents