KRS 355.4-201: Status of collecting bank as agent and provisional status of credits --

Applicability of article -- Item indorsed "pay any bank."

(1) Unless a contrary intent clearly appears and before the time that a settlement given

by a collecting bank for an it em 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immediate withdrawal as of right or is in fact withdrawn; but the continuance of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 the purposes of presentment, payment, collection, or return,

the relevant provisions of this article apply even though ac tion of the 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 until the item has been:

(a) Returned to the customer initiating collection; or

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