47-4210

47-4210. Security interest of collecting bank
in items, accompanying documents and proceeds

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for the item has been withdrawn or applied;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agreement is withdrawn or applied in part, the security interest remains upon all the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, any 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section, credits first given are first withdrawn.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 chapter 9 of
this title, but:

1. No security agreement is necessary to make the security interest enforceable
(section 47-9203, subsection B, paragraph 3, subdivision (a));

2. No filing is required to perfect the security interests; and

3. The security interest has priority over conflicting perfected security interests
in the item, accompanying documents or proceeds.