The bank’s timing for paying funds for a check or for returning a bounced check can sometimes be disputed. Banks must operate in a timely manner under the law, and failing to meet deadlines can cause considerable problems for consumers.
The Uniform Commercial Code (UCC) designates the cutoff time for banks as midnight the banking day following the day on which the item or notice is received. A banking day refers to the hours the bank is open to the public for handling transactions. Banks must either pay or dishonor a check by the midnight deadline. There are exceptions to the midnight deadline rule, such as when natural disasters or other emergency situations occur, computer systems or other equipment fails, or other banks suspend payments, because these situations are beyond a bank’s control.
Other lender liability defenses include the bank having consent to hold the check, the claimant suffering no damages and the legal action being brought after the statute of limitations has passed, which is three years in this situation.
Lending institutions typically rely on law firms to handle legal issues for them. Retaining a New Jersey Banking law attorney who is skilled in banking law is a necessary part of doing business, and experienced lawyers can protect clients’ interests.