(a) For the purpose of allowing time to process items, prove balances and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of two p.m. or later as a cutoff hour for the handling of money and items and the making of entries on its books.

(b) An item or deposit of money received on any day after a cutoff hour so fixed or after the close of the banking day may be treated as being received at the opening of the next banking day.

History: 1953 Comp., § 50A-4-107, enacted by Laws 1961, ch. 96, § 4-107; 1978 Comp., § 55-4-107, recompiled as 1978 Comp., § 55-4-108 by Laws 1992, ch. 114, § 163.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

1. Each of the huge volume of checks processed each day must go through a series of accounting procedures that consume time. Many banks have found it necessary to establish a cutoff hour to allow time for these procedures to be completed within the time limits imposed by Article 4. Subsection (a) approves a cutoff hour of this type provided it is not earlier than 2 P.M. Subsection (b) provides that if such a cutoff hour is fixed, items received after the cutoff hour may be treated as being received at the opening of the next banking day. If the number of items received either through the mail or over the counter tends to taper off radically as the afternoon hours progress, a 2 P.M. cutoff hour does not involve a large portion of the items received but at the same time permits a bank using such a cutoff hour to leave its doors open later in the afternoon without forcing into the evening the completion of its settling and proving process.

2. The provision in Subsection (b) that items or deposits received after the close of the banking day may be treated as received at the opening of the next banking day is important in cases in which a bank closes at twelve or one o'clock, e.g., on a Saturday, but continues to receive some items by mail or over the counter if, for example, it opens Saturday evening for the limited purpose of receiving deposits and cashing checks.

Recompilations. — Laws 1992, ch. 114, § 164 recompiled former 55-4-108 NMSA 1978, relating to delays, as 55-4-109 NMSA 1978, effective July 1, 1992.

The 1992 amendment, effective July 1, 1992, substituted letters for numbers in the subsection designations; and substituted "An item" for "Any item" in Subsection (b).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 10 Am. Jur. 2d Banks § 699.

Liability of bank in connection with night depositor service, 77 A.L.R.3d 597.

9 C.J.S. Banks and Banking §§ 273, 274, 383.