Guide to Banking Labor Laws

Part 3 governs the actions of the bank that is responsible for the payment of the check (payor bank). Part 4 governs the relationship between a payor bank and its customers. Part 5 governs documentary drafts. These are checks or other types of drafts that will only be honored if certain papers are first presented to the payor of the draft. If a check passes through the federal reserve system (as the majority of checks do) Regulation J of the Federal Reserve comes into effect. Regulation CC governs extensively the availability of funds in a depositor’s account and the process involving checks dishonored due to non-payment.

by Andrea

The restrictions on checking and money market accounts were lifted nationwide by the DIDRA (by the authorization of NOW and Super NOW checking accounts) and the Garn-St Germain Depository Institutions Act. The operation of checking accounts is governed by state law supplemented by some federal law. Article 4 of the Uniform Commercial Code, which has been adopted at least in part in every state, “defines rights between parties with respect to bank deposits and collections.” Part 1 of the Article contains general provisions and definitions. Part 2 governs the actions of the first bank to accept the check (depository bank) and other banks that handle the check but are not responsible for its final payment (collecting banks).