(810 ILCS 5/Art. 4 Pt. 3 heading)
PART 3.
COLLECTION OF ITEMS: PAYOR BANKS
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(810 ILCS 5/4-301) (from Ch. 26, par. 4-301)
Sec. 4-301.
Deferred posting; Recovery of payment by return of items;
time of dishonor; return of items by payor bank.
(a) If a payor bank settles for a demand item other than a documentary draft
presented otherwise than for immediate payment over the counter before midnight
of the banking day of receipt, the payor bank may revoke the settlement and
recover the settlement if, before it has made final payment and before its
midnight deadline, it:
(1) returns the item; or
(2) sends written notice of dishonor or nonpayment if
| | the item is unavailable for return.
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(b) If a demand item is received by a payor bank for credit on its books, it
may return the item or send notice of dishonor and may revoke any credit given
or recover the amount thereof withdrawn by its customer, if it acts within the
time limit and in the manner specified in subsection (a).
(c) Unless previous notice of dishonor has been sent, an item is
dishonored at the time when for purposes of dishonor it is returned or
notice sent in accordance with this Section.
(d) An item is returned:
(1) as to an item presented through a clearing-house,
| | when it is delivered to the presenting or last collecting bank or to the clearing-house or is sent or delivered in accordance with clearing-house rules; or
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(2) in all other cases, when it is sent or delivered
| | to the bank's customer or transferor or pursuant to instructions.
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(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/4-302) (from Ch. 26, par. 4-302)
Sec. 4-302.
Payor bank's responsibility for late return of item.
(a) If an item is presented to and received by a payor
bank, the bank is accountable for the amount of:
(1) a demand item, other than a documentary draft,
| | whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline; or
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(2) any other properly payable item unless, within
| | the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.
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(b) The liability of a payor bank to pay an item pursuant to
subsection (a) is
subject to defenses based on breach of a presentment
warranty (Section 4-208) or proof that the person seeking enforcement of
the liability presented or transferred the item for the purpose of
defrauding the payor bank.
(Source: P.A. 87-582; 87-1135; 87-1242; 88-123.)
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(810 ILCS 5/4-303) (from Ch. 26, par. 4-303)
Sec. 4-303.
When items subject to notice, stop-payment order, legal process,
or setoff; order in which items may be charged or certified.
(a) 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:
(1) the bank accepts or certifies the item;
(2) the bank pays the item in cash;
(3) the bank settles for the item without having a
| | right to revoke the settlement under statute, clearing-house rule, or agreement;
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(4) the bank becomes accountable for the amount of
| | the item under Section 4-302 dealing with the payor bank's responsibility for late return of items; or
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(5) 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.
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(b) Subject to subsection (a), items may be accepted, paid, certified, or
charged to the indicated account of its customer in any order.
(Source: P.A. 87-582; 87-1135.)
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