(810 ILCS 5/4-210)
(from Ch. 26, par. 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 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the extent to which credit given for the item has been withdrawn or applied;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 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 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to a single agreement is withdrawn or applied in part, the security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are first withdrawn.
(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 Article 9, but:
(1) no security agreement is necessary to make the
security interest enforceable (Section 9-203(b)(3)(A));
(2) no filing is required to perfect the security
(3) the security interest has priority over
conflicting perfected security interests in the item, accompanying documents, or proceeds.
(Source: P.A. 95-895, eff. 1-1-09; 96-328, eff. 8-11-09.)