(1) As against its customer, a bank may charge against his account any
item which is otherwise properly payable from that account even though
the charge creates an overdraft.
(2) A bank which in good faith makes payment to a holder may charge
the indicated account of its customer according to
(a) the original tenor of his altered item; or
(b) the tenor of his completed item, even though the bank knows
the item has been completed unless the bank has notice that
the completion was improper.
Structure New York Laws
Article 4 - Bank Deposits and Collections
Part 4 - Relationship Between Payor Bank and Its Customer
4-401 - When Bank May Charge Customer's Account.
4-402 - Bank's Liability to Customer for Wrongful Dishonor.
4-403 - Customer's Right to Stop Payment; Burden of Proof of Loss.
4-404 - Bank Not Obligated to Pay Check More Than Six Months Old.
4-405 - Death or Incompetence of Customer.
4-406 - Customer's Duty to Discover and Report Unauthorized Signature or Alteration.
4-407 - Payor Bank's Right to Subrogation on Improper Payment.