Opinion ID: 3013502
Heading Depth: 2
Heading Rank: 2

Heading: The Provisional Settlement

Text: After the Disputed Check was presented for deposit at NBT, the bank gave provisional credit to the depositor, PA Health, for the amount of the Disputed Check. NBT also transmitted the Disputed Check to the Reserve Bank for presentment to FNCB. Upon transmission to the Reserve Bank, NBT was given a provisional credit from FNCB’s Reserve Bank account for the face amount of the Disputed Check.2 The Reserve Bank then forwarded the Disputed Check to FNCB, and FNCB received it on March 12, 2001. Under the UCC, if FNCB wished to refuse payment on the Disputed Check, FNCB was obligated to revoke the provisional settlement granted to NBT by 11:59 p.m. on March 13, 2001.3 See 13 Pa. Cons. Stat. Ann. §§ 4301, 4215. 2 The Reserve Bank was acting as a clearinghouse or transferor bank for items moving between other banks, including FNCB and NBT. The Reserve Bank’s services are used to facilitate prompt payment, accurate accounting, and expedited availability of funds. 3 A brief summary of the provisional credit process under the UCC may aid understanding of the issues raised in this appeal. Article 4 of the UCC provisionally assumes that when a check is deposited for payment, it will be paid by its drawer. See 13 Pa. Cons. Stat. Ann. §§ 4201(a), 4214(a), 4215(a)(2), 4301. See generally 1 Barkley Clark & Barbara Clark, T HE L AW OF B ANK D EPOSITS, C OLLECTIONS AND C REDIT C ARDS, § 6.01 (5th ed. 6