Oak Brook Bank v. Northern Trust Company

POSNER, Circuit Judge.

A bank that dishonors a check presented to it for payment must return the check to the bank in which the check had been deposited (the “depositary” bank), either directly or via a “returning bank,” which acts as a transmitting agent. (The bank to which the check is presented for payment is called, even if it dishonors the check, the “payor” bank — a confusing usage in this context since it has refused to pay the check.) Like the other federal reserve banks, the Federal Reserve Bank of Chicago is a returning bank; indeed, returning checks is the major conventional banking…