(a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either: (1) In case of an item deposited in an account, to the extent to which credit given for the item has been withdrawn or applied; (2) in case of an item for which it has given credit available for withdrawal as of right, to the extent of the credit given, whether or not the credit is drawn 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(b) If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part, the security interest remains upon all the items, and accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.
(c) Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item, accompanying documents, and proceeds. So long as the bank does not receive final settlement for the item or give up possession of the item or possession or control of the accompanying documents for purposes other than collection, the security interest continues to that extent and is subject to article 9, but: (1) No security agreement is necessary to make the security interest enforceable, as provided in subsection (b)(3)(A) of section 42a-9-203; (2) no filing is required to perfect the security interest; and (3) the security interest has priority over conflicting perfected security interests in the item, accompanying documents or proceeds.
(1959, P.A. 133, S. 4-210; P.A. 91-304, S. 88; May Sp. Sess. P.A. 92-11, S. 22, 70; P.A. 01-132, S. 143; P.A. 04-64, S. 58.)
History: P.A. 91-304 entirely replaced former provisions re presentment by notice of item not payable by, through or at a bank and liability of secondary parties with provisions re security interest of collecting bank in items, accompanying documents and proceeds, a restatement of Sec. 42a-4-208, revised to 1991; May Sp. Sess. P.A. 92-11 made a technical change in Subsec. (c); P.A. 01-132 amended Subsec. (c) to replace reference to Sec. 42a-9-203(1)(a) with Sec. 42a-9-203(b)(3)(A); P.A. 04-64 amended Subsec. (c) by adding “possession or control of the” re accompanying documents to conform to revisions made to article 7 by the same act.
See Sec. 42a-4-212 for successor provisions to Sec. 42a-4-210, revised to 1991, re presentment by notice of item not payable by, through or at bank and liability of secondary parties.