This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the responsibility of collecting banks in the collection and return of items. A collecting bank is required to exercise ordinary care in presenting an item or sending it for presentment, sending notice of dishonor or nonpayment, settling for an item, and notifying its transferor of any loss or delay in transit. The bank must take proper action within its midnight deadline following receipt of an item, notice, or settlement to exercise ordinary care.

Subject to article 3 concerning conversion of instruments (section 336.3-420 ) and restrictive endorsements (section 336.3-206 ), only a collecting bank’s transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions or in accordance with any agreement with its transferor. History: 1965 c 811 s 336.4-203; 1992 c 565 s 85

(a) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items. (b) A collecting bank may send: (1) an item directly to the payor bank; (2) an item to a nonbank payor if authorized by its transferor; and (3) an item other than documentary drafts to a nonbank payor, if authorized by federal reserve regulation or operating circular, clearinghouse rule, or the like.

If a customer delivers an item to a depositary bank for collection: (1) the depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer endorses the item, and, if the bank satisfies the other requirements of section 336.3-302 , it is a holder in due course; and (2) the depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer’s account.

Any agreed method that identifies the transferor bank is sufficient for the item’s further transfer to another bank. History: 1965 c 811 s 336.4-206; 1992 c 565 s 88

This legal document governs transfer warranties in the context of item transfers and settlements. It applies to customers, collecting banks, transferees, and subsequent collecting banks involved in the transfer of items. The document outlines the warranties made by the transferor, including the authenticity and authorization of signatures, absence of alterations, absence of defenses or claims in recoupment, lack of knowledge of insolvency proceedings, and authorization for remotely created items. If an item is dishonored, the transferor is obliged to pay the amount due on the item according to its terms at the time of transfer or completion.

This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, specifically addresses presentment warranties in the context of drafts and items. It outlines the obligations and warranties of various parties involved in the payment or acceptance of drafts, including the person obtaining payment or acceptance, previous transferors of the draft, and the drawee. The document specifies the warranties that must be made regarding the entitlement to enforce the draft, absence of alterations, knowledge of unauthorized signatures, and authorization for remotely created items.

This section of the Minnesota Statutes, specifically under the Trade Regulations and Consumer Protection section of the Uniform Commercial Code, governs encoding and retention warranties. It establishes the warranties made by persons who encode information on or with respect to an item after issue, as well as persons who undertake to retain an item pursuant to an agreement for electronic presentment. These warranties extend to subsequent collecting banks, payor banks or other payors.

This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, specifically section 336.4-210, addresses the security interest of a collecting bank in items, accompanying documents, and proceeds. It outlines the circumstances under which a collecting bank has a security interest, including when credit has been withdrawn or applied for an item deposited in an account, when credit has been given for an item available for withdrawal, or when an advance has been made on or against the item.

336.4-211 MS 1990 [Renumbered 336.4-213 ] 336.4-211 WHEN BANK GIVES VALUE FOR PURPOSES OF HOLDER IN DUE COURSE. For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of section 336.3-302 on what constitutes a holder in due course. History: 1965 c 811 s 336.