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Can you summarize MNST 336.4-201?
UNIFORM COMMERCIAL CODE > STATUS OF COLLECTING BANK AS AGENT AND PROVISIONAL STATUS OF CREDITS; APPLICABILITY OF ARTICLE; ITEM ENDORSED 'PAY ANY BANK'.
Short Summary
This provision under the Minnesota Statutes governs the status of a collecting bank as an agent and the provisional status of credits. It establishes that unless a contrary intent is clearly stated, a collecting bank is considered an agent or subagent of the owner of an item, and any settlement given for the item is provisional. This applies regardless of the form of endorsement or lack thereof, and even if credit for the item can be immediately withdrawn. However, the ownership of the item and the owner’s rights to proceeds are subject to the rights of the collecting bank, such as outstanding advances or rights of recoupment or setoff. The provision also applies when banks handle items for presentment, payment, collection, or return, even if a particular bank has purchased the item and is its owner. Additionally, the provision states that after an item is endorsed with the words ‘pay any bank’ or similar language, only a bank can acquire the rights of a holder until the item is returned to the customer or specially endorsed to a non-bank by a bank.
Whom does it apply to?
Collecting banks, owners of items, banks handling items for presentment, payment, collection, or return
What does it govern?
Status of collecting bank as agent and provisional status of credits
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota