N.Y. UCC Law § 4-212

Section 4--212. Right of Charge-Back or Refund.\n (1) If a collecting bank has made provisional settlement with its\ncustomer for an item and itself fails by reason of dishonor, suspension\nof payments by a bank or otherwise to receive a settlement for the item\nwhich is or becomes final, the bank may revoke the settlement given by\nit, charge back the amount of any credit given for the item to its\ncustomer's account or obtain refund from its customer whether or not it\nis able to return the items if by its midnight deadline or within a\nlonger reasonable time after it learns the facts it returns the item or\nsends notification of the facts. These rights to revoke, charge-back and\nobtain refund terminate if and when a settlement for the item received\nby the bank is or becomes final (subsection (3) of Section 4--211 and\nsubsections (2) and (3) of Section 4--213).\n (2) Within the time and manner prescribed by this section and Section\n4--301, an intermediary or payor bank, as the case may be, may return an\nunpaid item directly to the depositary bank and may send for collection\na draft on the depositary bank and obtain reimbursement. In such case,\nif the depositary bank has received provisional settlement for the item,\nit must reimburse the bank drawing the draft and any provisional credits\nfor the item between banks shall become and remain final.\n (3) A depositary bank which is also the payor may charge-back the\namount of an item to its customer's account or obtain refund in\naccordance with the section governing return of an item received by a\npayor bank for credit on its books (Section 4--301).\n (4) The right to charge-back is not affected by\n (a) prior use of the credit given for the item; or\n (b) failure by any bank to exercise ordinary care with respect to\n the item but any bank so failing remains liable.\n (5) A failure to charge-back or claim refund does not affect other\nrights of the bank against the customer or any other party.\n (6) If credit is given in dollars as the equivalent of the value of an\nitem payable in a foreign currency the dollar amount of any charge-back\nor refund shall be calculated on the basis of the buying sight rate for\nthe foreign currency prevailing on the day when the person entitled to\nthe charge-back or refund learns that it will not receive payment in\nordinary course.\n