§ 4210. Security interest of collecting bank in items,

accompanying documents and proceeds.

(a) General rule.--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(1) in case of an item deposited in an account, to the extent to which credit given for the item has been withdrawn or applied;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) Partial withdrawal of credit given for several items.-- If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part, the security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.

(c) Satisfaction and continuation of security interest.-- 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 Division 9 (relating to secured transactions), but:

(1) no security agreement is necessary to make the security interest enforceable (section 9203(b)(3)(i)

(relating to attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites));

(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. (Nov. 26, 1982, P.L.696, No.201, eff. 180 days; July 9, 1992, P.L.507, No.97, eff. one year; June 8, 2001, P.L.123, No.18, eff. July 1, 2001; Apr. 16, 2008, P.L.57, No.13, eff. 60 days)

2008 Amendment. Act 13 amended subsec. (c) intro. par.

2001 Amendment. Act 18 amended subsec. (c).

1992 Amendment. Act 97 amended and renumbered section 4208 to section 4210 and renumbered section 4210 to section 4212.

Cross References. Section 4210 is referred to in sections 9102, 9109, 9203, 9309, 9322 of this title.