8.4-208 - Security interest of collecting bank in items, accompanying documents and proceeds.
§ 8.4-208. Security interest of collecting bank in items, accompanyingdocuments and proceeds.
(a) A collecting bank has a security interest in an item and any accompanyingdocuments or the proceeds of either:
(1) in case of an item deposited in an account to the extent to which creditgiven for the item has been withdrawn or applied;
(2) in case of an item for which it has given credit available for withdrawalas of right, to the extent of the credit given, whether or not the credit isdrawn upon or there is a right of charge-back; or
(3) if it makes an advance on or against the item.
(b) If credit given for several items received at one time or pursuant to asingle agreement is withdrawn or applied in part, the security interestremains upon all the items, any accompanying documents or the proceeds ofeither. For the purpose of this section, credits first given are firstwithdrawn.
(c) Receipt by a collecting bank of a final settlement for an item is arealization on its security interest in the item, accompanying documents andproceeds. So long as the bank does not receive final settlement for the itemor give up possession of the item or possession or control of accompanyingdocuments for purposes other than collection, the security interest continuesto that extent and is subject to Title 8.9A but:
(1) no security agreement is necessary to make the security interestenforceable (subdivision (b) (3) (A) of § 8.9A-203); and
(2) no filing is required to perfect the security interest; and
(3) the security interest has priority over conflicting perfected securityinterests in the item, accompanying documents or proceeds.
(1964, c. 219; 1992, c. 693; 2000, c. 1007; 2004, c. 200.)