§ 4-201 — Presumption and Duration of Agency Status of Collecting Banks and Provisional Status of Credits; Applicability of Article; Item Indorsed ...

Section 4--201. Presumption and Duration of Agency Status of Collecting\n Banks and Provisional Status of Credits; Applicability\n of Article; Item Indorsed "Pay Any Bank".\n (1) Unless a contrary intent clearly appears and prior to the time\nthat a settlement given by a collecting bank for an item is or becomes\nfinal (subsection (3) of Section 4--211 and Sections 4--212 and 4--213)\nthe bank is an agent or sub-agent of the owner of the item and any\nsettlement given for the item is provisional. This provision applies\nregardless of the form of indorsement or lack of indorsement and even\nthough credit given for the item is subject to immediate withdrawal as\nof right or is in fact withdrawn; but the continuance of ownership of an\nitem by its owner and any rights of the owner to proceeds of the item\nare subject to rights of a collecting bank such as those resulting from\noutstanding advances on the item and valid rights of setoff. When an\nitem is handled by banks for purposes of presentment, payment and\ncollection, the relevant provisions of this Article apply even though\naction of parties clearly establishes that a particular bank has\npurchased the item and is the owner of it.\n (2) After an item has been indorsed with the words "pay any bank" or\nthe like, only a bank may acquire the rights of a holder\n (a) until the item has been returned to the customer initiating\n collection; or\n (b) until the item has been specially indorsed by a bank to a\n person who is not a bank.\n