MARVIN MANDEL, Governor                                  191

(e) Correcting or reversing an entry or
erroneous action with respect to the item.

SUBTITLE 2. COLLECTION OF ITEMS; DEPOSITARY AND
COLLECTING BANKS.

4—201. Presumption and duration of agency status of
collecting banks and provisional status of credits;
applicability of [subtitle] TITLE; item indorsed "pay any
bank."

(1)    Unless a contrary intent clearly appears and
prior to the time that a settlement given by a collecting
bank for an item is or becomes final (subsection (3) of §
4-211—and §§ 4-212 and 4-213) the bank is an agent or
subagent of the owner of the item and any settlement
given for the item is provisional. This provision
applies regardless of the form of indorsement or lack of
indorsement and even though credit given for the item is
subject to immediate withdrawal as of right or is in fact
withdrawn; but the continuance of ownership of an item by
its owner and any rights of the owner to proceeds of the
item are subject to rights of a collecting bank such as
those resulting from outstanding advances on the item and
valid rights of setoff. When an item is handled by
banks for purposes of presentment, payment and
collection, the relevant provisions of this (subtitle)
TITLE apply even though action of parties clearly
establishes that a particular bank has purchased the item
and is the owner of it.

(2)    After an item has been indorsed with the words
"pay any bank" or the like, only a bank may acquire the
rights of a holder

(a)    Until the item has been returned to the
customer initiating collection; or

(b)    Until the item has been specially
indorsed by a bank to a person who is not a bank.

4—202. Responsibility for collection; when action
seasonable.

(1) A collecting bank must use ordinary care in

(a) Presenting an item or sending it for
presentment; and

(b) Sending notice of dishonor or non-payment
or returning an item other than a documentary draft to
the bank's transferor or directly to the depositary bank
under subsection (2) of § 4-212 after learning that the
item has not been paid or accepted, as the case may be;