Michigan Laws 440.4210 – Security interest of collecting bank in items, accompanying documents, or proceeds
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Terms Used In Michigan Laws 440.4210
- Account: means any depositor credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See Michigan Laws 440.4104
- Bank: means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company. See Michigan Laws 440.4105
- Collecting bank: means a bank handling the item for collection except the payor bank. See Michigan Laws 440.4105
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or pay. See Michigan Laws 440.4104
- Right: includes remedy. See Michigan Laws 440.1201
- Security interest: means an interest in personal property or fixtures which secures payment or performance of an obligation. See Michigan Laws 440.1201
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(1) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of any of the following:
(a) If an item is deposited in an account, to the extent to which credit given for the item has been withdrawn or applied.
(b) If an item for which it has given credit is available for withdrawal as of right, to the extent of the credit given whether or not the credit is drawn upon and whether or not there is a right of charge-back.
(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(2) If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part the security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.
(3) 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 except for the following:
(a) A security agreement is not necessary to make the security interest enforceable under section 9203(2)(c)(i).
(b) A filing is not required to perfect the security interest.
(c) The security interest has priority over conflicting perfected security interests in the item, accompanying documents, or proceeds.