554.4216 Insolvency and preference. 1. If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver,trustee, or agent in charge of the closed bank to the presenting bank or the closed bank’scustomer. 2. If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is orbecomes final, the owner of the item has a preferred claim against the payor bank. 3. If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere withthe settlement’s becoming final if the finality occurs automatically upon the lapse of certaintime or the happening of certain events. 4. If a collecting bank receives from subsequent parties settlement for an item which settlement is or becomes final and the bank suspends payments without making a settlementfor the item with its customer which settlement is or becomes final, the owner of the item hasa preferred claim against the collecting final and the bank suspends payments without making a settlementfor the item with its customer which settlement is or becomes final, the owner of the item hasa preferred claim against the collecting bank. [C66, 71, 73, 75, 77, 79, 81, §554.4214]94 Acts, ch 1167, §101, 120, 122C95, §554.4216 Sat Dec 23 01:57:26 2023 Iowa Code 2024, Section 554.4216 (24, 0)
Iowa Legal Code