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HomeCommercial CodeDiv. 4Ch. 2§ 4204 Bank Item Collection Rules

§ 4204 Bank Item Collection Rules

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 4204 Bank Item Collection Rules

This law says that when a bank collects a payment item, it must mail it to the paying bank using a quick and appropriate method, and it can send it directly to the paying bank or to an authorized non‑bank payer.

Key Takeaways

  • •Banks must send collected items promptly and using a reasonable method.
  • •Items can be sent directly to the paying bank or to an authorized non‑bank payer.
  • •Presentment can occur at a location the payer bank has requested.

Example

You deposit a check at your local bank. That bank must forward the check to the bank that wrote it, using a fast and usual way of sending it.

The bank that holds your check has to send it to the payer bank quickly, following normal banking practices, and it can deliver it straight to the payer bank or to another approved place if that payer asked for it.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 4204 Bank Item Collection Rules

(a) A collecting bank shall send items by reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items. (b) A collecting bank may send: (1) An item directly to the payor bank. (2) An item to a nonbank payor if authorized by its transferor. (3) An item other than documentary drafts to a nonbank payor, if authorized by Federal Reserve regulation or operating circular, clearing house rule, or the like. (c) Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that presentment be made. (Amended by Stats. 1992, Ch. 914, Sec. 21. Effective January 1, 1993.)

Last verified: January 10, 2026

Key Terms

collecting bankpayor banknonbank payorpresentment

Related Statutes

  • § 4212 Bank Item Presentment Notice
  • § 4216 Bank Item Return Rules
  • § 4201 Bank Settlement Provisional Status
  • § 4202 Bank Item Collection Duties
  • § 4203 Bank Transfer Instructions Liability

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 4204.
View Official Source