What does Article 3 of the UCC predominantly address in banking?

Article 3 of the Uniform Commercial Code (UCC) predominantly addresses negotiable instruments, which are financial documents that guarantee the payment of a specific amount of money, either on demand or at a set time. This includes instruments like checks, promissory notes, and drafts. The significance of this article lies in its definition, creation, transfer, and enforcement of these instruments, which are fundamental to banking and commercial transactions.

In the context of banking, understanding Article 3 is essential for managing the risks associated with negotiating instruments and ensuring that they are legally enforceable. It delineates the rights and responsibilities of participants involved in transactions with negotiable instruments, ensuring clarity and legal consistency in banking operations. This foundational framework is crucial for bank tellers and financial institutions as they handle various financial transactions involving these instruments.