(a) Banks, both state and national, have the right to make an exchange charge for the handling of cash items, and when the cash items are presented to the payer bank for payment through or by any bank, banker, trust company, federal reserve bank, post office, express company, collection agency, or by any other agency whatever, the amount of the charge shall not exceed one-tenth of one percent (.1%) of the total amount of the cash item, so presented and paid at one (1) time, and the minimum charge shall be ten cents (10¢); provided, that the charge shall not be made on checks or drafts given or drawn in settlement of obligations due the state or any subdivision of the state, or of the United States, and that the charge may not be made by banks for the collection of checks deposited with the banks, when the check is drawn on any other bank in the same municipality, city, town or village; and provided further, that nothing in this section shall be deemed mandatory upon the banks to charge exchange on checks or drafts payable to a person in this state, and drawn on a bank, trust company, or persons within or without this state, but it shall be optional with the banks whether they shall so charge exchange.
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Terms Used In Tennessee Code 45-2-613

  • Bank: means any person, as hereinafter defined, doing a banking business subject to the laws of this or any other jurisdiction and, for the purposes of supervision, examination and liquidation, includes industrial investment companies and industrial banks authorized by chapter 5 of this title. See Tennessee Code 45-1-103
  • Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
  • Item: means any instrument for the payment of money, even though not negotiable, but does not include money. See Tennessee Code 45-1-103
  • National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
  • Person: means an individual, corporation, firm, trust, estate, partnership, joint venture, or association. See Tennessee Code 45-1-103
  • 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.
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trust company: means a state trust company or any other company chartered to act as a fiduciary that is neither a depository institution nor a foreign bank. See Tennessee Code 45-1-103
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) No officer shall protest for nonpayment the cash item when the nonpayment is solely on account of the failure or refusal of any of the agencies to pay the exchange, and there shall be no right of action, either at law or in equity, against any bank in this state for a refusal to pay the cash item when the refusal is based alone on the ground of the nonpayment of the exchange.
(c) If, by any law, rule, regulation or court decision, the national banks in this state are not permitted to charge and collect the exchange, subsections (a) and (b) shall remain in full force and effect as to all other banks in this state; and in the event of the holding by the courts, or the refusal of any national bank in this state to comply with the sections, it shall be optional with state banks located in the same municipality with national banks or state banks that are members of the federal reserve system as to whether the charge shall be made.
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