N.Y. Uniform Commercial Code Law Section 4-208
Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds

Section 4--208. Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds.

(1)

A bank has a security interest in an item and any accompanying documents or the proceeds of either (a) in case of an item deposited in an account to the extent to which credit given for the item has been withdrawn or applied;

(b)

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 and whether or not there is a right of charge-back; or

(c)

if it makes an advance on or against the item.

(2)

When credit which has been given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part the security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.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. To the extent and so long as the bank does not receive final settlement for the item or give up possession of the item or accompanying documents for purposes other than collection, the security interest continues and is subject to the provisions of Article 9 except that (a) no security agreement is necessary to make the security interest enforceable ( Section 9--203 (b)(3)(A)); and

(b)

no filing is required to perfect the security interest; and

(c)

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

Source: Section 4-208 — Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds, https://www.­nysenate.­gov/legislation/laws/UCC/4-208 (updated Sep. 22, 2014; accessed Oct. 25, 2025).

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Verified:
Oct. 25, 2025

Last modified:
Sep. 22, 2014

§ 4-208. Sec. Interest of Collecting Bank in Items, Accompanying Documents & Proceeds's source at nysenate​.gov

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