Montana Code 30-4-213. Final payment of item by payor bank — when provisional debits and credits become final — when certain credits become available for withdrawal
30-4-213. Final payment of item by payor bank — when provisional debits and credits become final — when certain credits become available for withdrawal. (1) An item is finally paid by a payor bank when the bank has done any of the following, whichever happens first:
Terms Used In Montana Code 30-4-213
- account: means any deposit or credit account with a bank and includes a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit;
(b)"afternoon" means the period of a day between noon and midnight;
(c)"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;
(d)"clearinghouse" means an association of banks or other payors regularly clearing items;
(e)"customer" means a person having an account with a bank or for whom a bank has agreed to collect items and includes a bank maintaining an account at another bank;
(f)"documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities (30-8-112) or instructions for uncertificated securities (30-8-112), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft;
(g)"draft" means a draft as defined in 30-3-104 or an item, other than an instrument, that is an order;
(h)"item" means an instrument or a promise or an order to pay money handled by a bank for collection or payment. See Montana Code 30-4-104
- bank: means any person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company;
(2)"depositary bank" means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter;
(3)"payor bank" means a bank that is the drawee of a draft;
(4)"intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank;
(5)"collecting bank" means a bank handling an item for collection except the payor bank;
(6)"presenting bank" means a bank presenting an item except a payor bank. See Montana Code 30-4-105
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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.
(a)paid the item in cash; or
(b)settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement; or
(c)made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearinghouse rule, or agreement.
(2)If provisional settlement for an item between the presenting and payor banks is made through a clearinghouse or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the item by the payor bank.
(3)If a collecting bank receives a settlement for an item which is or becomes final (subsections (3) and (4) of 30-4-211 and subsection (2) of this section) the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.
(4)Subject to applicable law stating a time for availability of funds and any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in a customer’s account becomes available for withdrawal as of right:
(a)if the bank has received a provisional settlement for the item, when such settlement becomes final and the bank has had a reasonable time to receive return of the item and the item has not been received within that time;
(b)if the bank is both the depositary bank and the payor bank and the item is finally paid, at the opening of the bank’s second banking day following receipt of the item.
(5)Subject to applicable law stating a time for availability of funds and any right of a bank to apply a deposit to an obligation of the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank’s next banking day after receipt of the deposit.