(a) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final, the bank, with respect to the item, 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of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank such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 rights of recoupment or setoff. If an item is handled by banks for purposes of presentment, payment, collection, or return, the relevant provisions of this article apply even though action of the parties clearly establishes that a particular bank has purchased the item and is the owner of it.
(b) 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 until the item has been:
(1) Returned to the customer initiating collection; or
(2) Specially indorsed by a bank to a person who is not a bank.
Source: L. 94: Entire article amended with relocations, p. 885, § 2, effective January 1, 1995.
ANNOTATION
Law reviews. For article, "Payee v. Depository Bank: What is the UCC Defense to Handling Checks Bearing Forged Indorsements?", see 45 U. Colo. L. Rev. 281 (1974). For article, "Commercial Law", which discusses Tenth Circuit decisions dealing with questions of definition and interpretation, see 63 Den. U.L. Rev. 225 (1986).
When risk of loss remains on depositor. Where one indorses a check payable to him and deposits it in a bank, the bank credits the money to the account, and the depositor withdraws the full amount, but subsequently the foreign payor bank refuses to honor the check, the depositor is still the owner of the check, the bank is the agent for collection, and the credit given for the deposit is only provisional; therefore, the risk of loss on the check remains on the depositor. Mercantile Bank & Trust Co. v. Hunter, 31 Colo. App. 200, 501 P.2d 486 (1972).