§ 6A-4-201 - Status of collecting bank as agent and provisional status of credits – Applicability of article – Item indorsed "Pay Any Bank". - Rhode Island Statutes

SECTION 6A-4-201

   § 6A-4-201  Status of collecting bank asagent and provisional status of credits – Applicability of article –Item indorsed "Pay Any Bank". – (a) Unless a contrary intent clearly appears and before the time that asettlement given by a collecting bank for an item is or becomes final, thebank, with respect to an item, is an agent or sub-agent of the owner of theitem and any settlement given for the item is provisional. This provisionapplies regardless of the form of indorsement or lack of indorsement and eventhough credit given for the item is subject to immediate withdrawal as of rightor is in fact withdrawn; but the continuance of ownership of an item by itsowner and any rights of the owner to proceeds of the item are subject to rightsof a collecting bank, such as those resulting from outstanding advances on theitem and rights of recoupment or setoff. If an item is handled by banks forpurposes of presentment, payment, collection, or return, the relevantprovisions of this chapter apply even though action of the parties clearlyestablishes that a particular bank has purchased the item and is the owner ofit.

   (b) After an item has been indorsed with the words "pay anybank" or the like, only a bank may acquire the rights of a holder until theitem has been:

   (1) Returned to the customer initiating collection; or

   (2) Specially indorsed by a bank to a person who is not abank.