70A-4-210 - Security interest of collecting bank in items, accompanying documents, and proceeds.
70A-4-210. Security interest of collecting bank in items, accompanying documents,and proceeds.
(1) A collecting bank has a security interest in an item and any accompanying documentsor the proceeds of either:
(a) in case of an item deposited in an account, to the extent to which credit given for theitem has been withdrawn or applied;
(b) in case of an item for which it has given credit available for withdrawal as of right, tothe extent of the credit given, whether or not the credit is drawn upon or there is a right ofcharge-back; or
(c) if it makes an advance on or against the item.
(2) If credit given for several items received at one time or pursuant to a single agreementis withdrawn or applied in part, the security interest remains upon all the items, anyaccompanying documents or the proceeds of either. For the purpose of this section, credits firstgiven are first withdrawn.
(3) Receipt by a collecting bank of a final settlement for an item is a realization on itssecurity interest in the item, accompanying documents, and proceeds. So long as the bank doesnot receive final settlement for the item or give up possession of the item or possession or controlof the accompanying documents for purposes other than collection, the security interest continuesto that extent and is subject to Chapter 9a, Uniform Commercial Code - Secured Transactions,but:
(a) no security agreement is necessary to make the security interest enforceable,Subsection 70A-9a-203(2)(c)(i);
(b) no filing is required to perfect the security interest; and
(c) the security interest has priority over conflicting perfected security interests in theitem, accompanying documents, or proceeds.
Amended by Chapter 42, 2006 General Session