§ 4211 Bank Holder Due Course

Commercial Code·California

AI SummaryVerified

This law says a bank can be treated as a "holder in due course" for a loan if it has a security interest in the collateral and follows the rules in Section 3302.

Key Takeaways

•A bank can be a holder in due course if it has a security interest in the collateral.
•The bank must also follow the rules in Section 3302.
•This protection helps banks feel confident lending money with collateral.

Example

A bank gives a loan to a small business and takes the business's equipment as security for the loan.

Because the bank has a security interest in the equipment and meets the other requirements of Section 3302, the law treats the bank as a holder in due course for that loan.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 4211 Bank Holder Due Course

For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of Section 3302 on what constitutes a holder in due course. (Added by renumbering Section 4209 by Stats. 1992, Ch. 914, Sec. 30. Effective January 1, 1993.)

Last verified: January 10, 2026

Key Terms

holder in due course security interest Section 3302

References

Official text at leginfo.legislature.ca.gov
California Legislature. Commercial Code. Section 4211.

Key Takeaways

Example

Key Terms

Related Statutes

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Key Takeaways

Example

Key Terms

Related Statutes

References