1. With respect to settlement by a bank, the medium and time of settlement may be prescribed by federal reserve regulations or circulars, clearinghouse rules, and the like, or agreement. In the absence of such prescription: a. 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. b. The time of settlement is: (1) With respect to tender of settlement by cash, cashier's check, or teller's check, when the cash or check is sent or delivered. (2) With respect to tender of settlement by credit in an account in a federal reserve bank, when the credit is made. (3) 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. (4) With respect to tender of settlement by a funds transfer, when payment is made under subsection 1 of section 41-04.1-31 to the person receiving settlement. 2. If the tender of settlement is not by a medium authorized by or the time of settlement is not fixed by subsection 1, no settlement occurs until the tender of settlement is accepted by the person receiving settlement. 3. If settlement for an item is made by cashier's check or teller's check and the person receiving settlement, before its midnight deadline: a. Presents or forwards the check of collection, settlement is final when the check is finally paid. b. Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement. 4. 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.
41-04-26. (4-214) Right of chargeback or refund - Liability of collecting bank - Return of item. 1. If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer's account, or obtain refund from its customer, whether or not it is able to return the items if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer but is liable for any loss resulting from the delay. These rights to revoke, charge back, and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final. 2. A collecting bank returns an item when it is sent or delivered to the bank's customer or transferor or under its instructions.
3. A depositary bank which is also the payor may charge back the amount of an item to its customer's account or obtain refund under the section governing return of an item received by a payor bank for credit on its books (section 41-04-29). 4. The right to charge back is not affected by: a. Previous use of a credit given for the item. b. Failure by any bank to exercise ordinary care with respect to the item, but any bank so failing remains liable. 5. A failure to charge back or claim refund does not affect other rights of the bank against the customer of any other party. 6. If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any chargeback or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the chargeback or refund learns that it will not receive payment in ordinary course.
41-04-27. (4-215) 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: a. Paid the item in cash. b. Settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement. 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 does not become final, the item is not finally paid. 3. 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 items by the payor bank. 4. If a collecting bank receives a settlement for an item which is or becomes final, 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. 5. 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 has not received the item 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. 6. 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.