§ 26-1-4-210 — 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 the 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which credit given for the item has been withdrawn or applied;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 the 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 (1) time or under
a single agreement is withdrawn or applied in part, the security interest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are first withdrawn.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 IC 26-1-9.1, but:
(1) no security agreement is necessary to make the security
interest enforceable (IC 26-1-9.1-203(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.
Formerly: Acts 1963, c.317, s.4-210. As amended by
P.L.152-1986, SEC.218; P.L.222-1993, SEC.26; P.L.57-2000, SEC.29;
P.L.1-2002, SEC.100; P.L.143-2007, SEC.23.