1. A collecting bank must exercise ordinary care in the following matters: a. Presenting an item or sending it for presentment. b. Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted. c. Settling for an item when the bank receives final settlement. d. Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof. 2. A collecting bank exercises ordinary care under subsection 1 by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care but the bank has the burden of so establishing. 3. Subject to subdivision a of subsection 1, a bank is not liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in transit or in the possession of others.
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