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LSDefine

Simple English definitions for legal terms

collection

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A quick definition of collection:

Collection is the process of moving money from one bank to another. When you deposit a check, it goes to your bank first, then it goes to the bank of the person who wrote the check. The bank that handles the check during this process is called a "collecting bank." There are many different types of banks, including ones that take deposits, ones that make loans, and ones that help businesses raise money.

A more thorough explanation:

Collection in banking refers to the process through which an item, such as a check, passes in a payor bank. It involves the transfer of the item from the depositary bank to the payor bank, with the help of intermediary banks, until the payor bank pays the amount of the item.

For example, if John writes a check to Mary, Mary deposits the check in her bank, which becomes the depositary bank. The depositary bank sends the check to an intermediary bank, which sends it to John's bank, the payor bank. The payor bank pays the amount of the check to Mary's bank, which credits Mary's account.

Collection involves several types of banks, such as:

  • Depository bank: the first bank to which an item is transferred for collection
  • Intermediary bank: a bank to which an item is transferred in the course of collection, even though the bank is not the depositary or payor bank
  • Payor bank: a bank that is asked to pay the amount of a negotiable instrument and is obliged to pay that amount
  • Collecting bank: any bank handling an item for collection, except for the payor bank or the depository bank

Each bank in the collection process has a specific role and responsibility, and the process can take several days or weeks, depending on the distance between the banks and the amount of the item.

collecting bank | collection indorsement

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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