1. If a collecting bank has made provisional settlement with its customer for an item and failsby reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which isor 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 itis able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts itreturns 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 itlearns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from itscustomer, but itis liable for any loss resulting from the delay. These rights to revoke, charge back, and obtain refund terminate ifand when a settlement for the item received by the bank isor becomes final. 2. A collecting bank returns an item when it is sent or delivered to the bank’s customer or transferor or pursuant to its instructions. 3. A depositary bank that is also the payor may charge back the amount of an item to its customer’s account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (section 554.4301). 4. The right to charge back isnot affected by: a. previous use of a credit given for the item; or b. failure by any bank to exercise ordinary care with respect to the item, but a 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 or any other party. 6. If credit isgiven in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any charge-back 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 charge-back or refund learns that itwill not receive payment in ordinary course. C95, §554.4214
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