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Texas Business & Commerce Code - Section 4.210. Security Interest Of Collecting Bank In Items, Accompanying Documents And Proceeds

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4.210. Security Interest Of Collecting Bank In Items, Accompanying Documents And Proceeds

§ 4.210. 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extent to which credit given for the item has been withdrawn or 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or pursuant to a single agreement is withdrawn or applied in part, 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section, credits first given are first withdrawn.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, but:
		(1)  no security agreement is necessary to make the 
security interest enforceable (Section 9.203(b)(3)(A));
		(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.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.  
Renumbered from § 4.208 and amended by Acts 1995, 74th Leg., ch. 
921, § 4, eff. Jan. 1, 1996.  Amended by Acts 1999, 76th Leg., ch. 
414, § 2.23, eff. July 1, 2001;  Acts 2005, 79th Leg., ch. 122, 
§ 17, eff. Sept. 1, 2005.

Last modified: August 10, 2007