§490:4-215  Final payment of item by payor

bank; when provisional debits and credits become final; when certain credits

become available for withdrawal.  (a)  An item is finally paid by a payor

bank when the bank has first done any of the following:

     (1)  Paid the item in cash;

     (2)  Settled for the item without having a right to

revoke the settlement under statute, clearing-house rule, or agreement; or

     (3)  Made a provisional settlement for the item and

failed to revoke the settlement in the time and manner permitted by statute,

clearing-house rule, or agreement.

     (b)  If provisional settlement for an item does

not become final, the item is not finally paid.

     (c)  If provisional settlement for an item

between the presenting and payor banks is made through a clearing-house 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.

     (d)  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.

     (e)  Subject to (i) applicable law stating a

time for availability of funds and (ii) 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:

     (1)  If the bank has received a provisional settlement

for the item, when the 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;

     (2)  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.

     Each depositary bank shall provide written

notice of its check hold policy and fund availability with respect to local,

out-of-state, and foreign checks drawn on United States financial institutions:

         (i)  When a checking account is opened; or

        (ii)  When there is a change in bank policy.

     The commissioner of financial institutions may

establish by rules reasonable periods for check hold and fund availability with

respect to local, out-of-state, and foreign checks drawn on United States

financial institutions.

     (f)  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. [L 1965, c 208, §4-213; HRS §490:4-213; am L 1986, c

44, §1; am L 1987, c 280, §1; am and ren L 1991, c 118, pt of §4]