2006 New York Code - Depositary And Collecting Banks

 
  Section 4--202. Responsibility for Collection; When Action Seasonable.
    (1) A collecting bank must use ordinary care in
         (a) presenting an item or sending it for presentment; and
         (b) sending  notice  of  dishonor  or non-payment or returning an
             item other than a documentary draft to the bank's  transferor
             or  directly  to  the depositary bank under subsection (2) of
             Section 4--212 after learning that the item has not been paid
             or accepted, as the case may be; and
         (c) settling for an item when the bank receives final settlement;
             and
         (d) making or providing for any necessary protest; and
         (e) notifying its transferor of any  loss  or  delay  in  transit
             within a reasonable time after discovery thereof.
    (2)  A  collecting  bank  taking  proper  action  before  its midnight
  deadline  following  receipt  of  an  item,  notice  or   payment   acts
  seasonably;  taking proper action within a reasonably longer time may be
  seasonable but the bank has the burden of so establishing.
    (3) Subject to subsection (1) (a),  a  bank  is  not  liable  for  the
  insolvency,  neglect,  misconduct, mistake or default of another bank or
  person or for loss or destruction of  an  item  in  transit  or  in  the
  possession of others.