Also known as: paying banks · drawee bank
Written by attorneys · grounded in primary & secondary sources — see below
The bank identified by the routing number on a check in magnetic ink or fractional form to which the check is sent for payment or collection.
Omar opens a client trust account at Pacific Bank to hold co-counsel fee splits. The bank assesses routine service charges on the account. Omar deposits a modest amount of firm funds solely to cover those charges. Pacific Bank functions as the paying bank when checks are later drawn on the account.
Ameripay issues payroll checks on behalf of NTRN drawn on an account at Commerce Bank. The checks list NTRN's details in the upper left corner. Commerce Bank receives the checks for payment and acts as the paying bank when it examines and processes them against the account.
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The paying bank is identified by the routing number appearing on the check in magnetic ink or in fractional form. That bank is the one to which the check is sent for payment or collection.
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A paying bank must comply with expeditious return and notice of dishonor requirements under Regulation CC. It may also face liability if it pays a check after missing its midnight deadline.
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Under older versions of Article 4 the issue was unclear. Current rules treat delivery to the paying bank itself as the key event that triggers the midnight deadline and related duties.
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Regulation CC treats payable-through and payable-at banks as paying banks for purposes of expeditious return and notice of dishonor. Article 4 treats them differently for midnight deadline purposes.
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