Michigan Laws 440.4303 – Payor bank; items subject to knowledge notice, stop-payment order, legal process, or setoff; order in which times may be handled
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Terms Used In Michigan Laws 440.4303
- Account: means any depositor credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See Michigan Laws 440.4104
- Bank: means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company. See Michigan Laws 440.4105
- Banking day: means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions. See Michigan Laws 440.4104
- Clearing-house: means an association of banks or other payors regularly clearing items. See Michigan Laws 440.4104
- Customer: means any person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See Michigan Laws 440.4104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or pay. See Michigan Laws 440.4104
- Payor bank: means a bank that is the drawee of a draft. See Michigan Laws 440.4105
- Right: includes remedy. See Michigan Laws 440.1201
- 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.
(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 4302 dealing with the payor bank‘s responsibility for late return of items.
(e) With respect to checks, a cutoff hour no earlier than 1 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.
(2) Subject to subsection (1) items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.