(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:

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Terms Used In Alabama Code 7-4-213

  • Account: means any deposit or 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;
(2) "Afternoon" means the period of a day between noon and midnight;
(3) "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;
(4) "Clearing house" means an association of banks or other payors regularly clearing items;
(5) "Customer" means a 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;
(6) "Documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities (Section 7-8-102) or instructions for uncertificated securities (Section 7-8-308), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft;
(7) "Draft" means a draft as defined in Section 7-3-104 or an item, other than an instrument, that is an order;
(8) "Drawee" means a person ordered in a draft to make payment;
(9) "Item" means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Alabama Code 7-4-104
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • 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.
    • (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 Section beneficiary; discharge of underlying obligation” class=”unlinked-ref” datatype=”S” sessionyear=”2020″ statecd=”AL” title=”7″>7-4A-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 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.