| PAYMENT SYSTEMS AND SECURED TRANSACTIONS
This guide has a twofold purpose. First, it provides a bibliography of primary and secondary materials on the UCC (highlighting Massachusetts). The second part is organized into the major topical areas for payment systems and secured transactions. Each section is roughly described and annotated with apt primary and secondary sources (where appropriate to Massachusetts sources). Any questions or suggestions, please e-mail lawref@suffolk.edu.
Bibliography
Uniform Commercial Code
- Uniform Commercial Code (LII website) - Article 9 and Article 3 (available free online - unannotated)
- Comprehensive Commercial Law - Statutory Supplement (Aspen 2009) [KF875.99 .C66]
- Commercial Law - Selected Statutes (Foundation 2009) [KF875.99 .C63]
Commercial/UCC Case Reporters
- Matthew Bender’s Uniform Commercial Code Service Reporter - Digest (LexisNexis).
Similar to Westlaw’s UCC Reporting Service, this is a digest and reporter. On LexisNexis, choose the Commercial Law folder, and under the Treatises and Analytical Materials folder the Matthew Bender option) - KF 885.B45
- Uniform Commercial Code Reporting Service, Second Series, Cases and Commentary; Uniform Commercial Code Reporting Service Digest (Thomson West)
This series reprints important UCC cases by section number in each volume - includes tables on state variations. The Digest is similarly arranged by UCC section number. Also available on Westlaw - KF890.U58 P636
Multi-Volume Treatises and Form Books
General
- R. Anderson & L. Lawrence, Anderson on the Uniform Commercial Code 3d (good multi-volume treatise divided by UCC section number, similar to Mass Practice – also contains state-by-state statutory equivalents) - KF 879.514.A53
- Matthew Bender’s Uniform Commercial Code Service Forms and Procedures (multi-volume legal form series of Matthew Bender that accompanies the Reporter-Digest) - KF 885.B45
- Uniform Commercial Code Legal Forms, Fourth Edition by S. Flanagan (Thomson West) (form version of West’s Case and Digest set) - KF886 .F53
Massachusetts
- Massachusetts Practice Series, Manual on Uniform Commercial Code, Third Edition, Vol. 25 – 27 (Massachusetts specific; explains application of Articles 3-9 in state context, with case citations, Volume 27 contains myriad sample forms. Note that section numbers do not correspond to UCC numbers) (also available in Westlaw) - KFM 2480 M3 & KFM 2480.M3 v. 26-27B
- Massachusetts Secured Transactions Under Revised Article 9 of the Uniform Commercial Code, by M. Refolo, R. Sheils and C. DeBevoise (2009) (another Massachusetts specific practice and form handbook written by practicing attorneys) - KFM 2575.R44
- MCLE Drafting Commercial Documents in Massachusetts, Volume II, Chapter 7, “Security Agreements and Financing Statements,” by K. McEnaney, P. Ricotta, E. Sibble & T. Walsh (1999) (great resource, lays out exact forms with extensive footnotes explaining important sections with regard to UCC and why they are important) - KFM2552.Z9 D73
Secondary Materials
- Payments Law in a Nutshell by S. Nickles and M. Matthews (West) (covers all areas of payment law, broken down into understandable sections) - KF957.Z9 N535
- Payment Systems - Examples & Explanations, Third Edition by James Brook (Aspen 2007) (contains helpful and clear explanation of payment systems, mainly article 3 negotiable instruments, including examples with explanations) - KF933 .B76
- Practice under Article 9 of the Uniform Commercial Code by Stephen L. Sepinuck (ABA 2009) (guide to new changes to Article 9) - KF1050 .P73
- Repossessions, The Consumer Credit and Sales Legal Practice Series, Sixth Edition by C. Carter (National Consumer Law Center) (great resource dealing with default, repossession, replevin, self-help, bankruptcy, collateral disposition, deficiencies/surpluses, consumer laws, liens, and lists relevant statutes for all states at the back. Highly recommended) - KF1058.C37
- Secured Transactions, Examples & Explanations, Fourth Edition by James Brook (Aspen) (similar to a Nutshell, but provides more in depth examples with explanations) - KF1053.Z9 B76
- Secured Transactions in a Nutshell, Fifth Edition, by R. Hagedorn (West) (breaks down and explains each area of Article 9 and Secured Transactions, with examples) - KF1050.Z9 H34
- Understanding Secured Transactions, Second Edition, by W. Lawrence, W. Henning & R. W. Freyermuth (Lexis) (in-depth breakdown of article 9 and secured transactions with case citations) - KF1050 .L39
- Uniform Commercial Code, Sixth Edition, by J. White & R. Summers (West) (contains in-depth and helpful explanation of Articles 3 – 9 - a good starting point) - KF890 .W45
Other Online Materials
- The American Law Institute contains up-to-date information on new suggested changes by the Permanent Editorial Board to the UCC
- The National Conference of Commissioners on Uniform State Laws has archives for previous UCC versions, meetings, reports, proposals, etc (good for legislative intent) and has a website where you can track legislative UCC changes in state legislatures
Westlaw and LexisNexis
- Lexis – Under Area 0f law by Topic/Commercial Law (UCC), you will find sub-folders like Mutli-Sources, Filings, Statutory Materials, Treatises and Regulations.
- Westlaw – Under View Westlaw Directory/Total Practice Area/Commercial Law/Uniform Commercial Code, are databases such as UCC Cases (UCC-CS), Anderson on Commercial Code (ANDR-UCC), Uniform Laws Annotated (ULA), etc.
Secured Transactions
- Attachment and the Security Agreement
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- Synopsis
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- Attachment is a contractual agreement whereby the debtor agrees to give an enforceable interest in a definable piece of property (collateral) to a secured party (UCC 9-203(a)). An enforceable security interest requires, a) value, b) rights remaining in the property for the debtor, and c) a security agreement. Attachment and perfection are required to gain priority for a secured party.
- Secondary
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- Secured Transactions, Examples, pp. 3-78; Secured Transactions, Nutshell, pp. 63-108p; Mass Practice, §§ 9:51-9:67.
- Forms
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- Mass Practice UCC Forms Annotated
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- § 9-102 (security agreements, aka attachment, for various types of collateral, e.g. consumer, automobiles, etc. Extensive example forms covering all types of security agreements – 104 forms)
- § 9-104 (non-article 9 collateral, intended or unintended)
- § 9-105-114 (collateral descriptions forms)
- § 9-201-203 (examples of clarifying clauses for financing agreements, e.g. rights of rescission, assignment, )
- § 9-204-205 (after-acquired property, floating liens, etc)
- § 9-207 (actions of secured party in possession)
- § 9-208 (requests of debt from debtors by third-parties)
- MCLE
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- Other
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- Statutory
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- Uniform Commercial Code, §§ 9-102(12),(72),(73), 9-201 to 9-210; MGL Chap. 106, §§ 9-201 to 210
- See also
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- Matthew Bender’s and West’s Uniform Commercial Code Form Book
- Perfection of the Security Interest - By Filing
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- Synopsis
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- Many "security interests" are perfected by filing a financing statement with the state. Alterations like terminations, assignments and continuations should be filed. Note: perfection (by filing or otherwise, see below), is required to protect your interest against subsequent third parties, but is not required for the secured party to pursue contractual remedies against the borrower.
- Secondary
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- Secured Transactions, Nutshell, pp. 173-76, 197-272; Secured Transactions, Examples, pp. 103-142; LoPocki, pp. 951-993, Mass Practice, §§ 9:181-9:204 (also contains relevant CMR)
- Forms
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- Uniform Commercial Code
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- 9-521 (sample form that must be accepted by state filing offices unless 516(b) applies or the office does not accept written forms)
- Mass Practice
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- § 9-401 (forms about use, location, etc of collateral)
- § 9-402 (Massachusetts specific financing statement examples)
- § 9-403 (continuation forms)
- § 9-404-6 (assignment, termination and other release forms)
- MCLE
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- Statutory
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- Uniform Commercial Code, §§ 9-501 to 9-527; MGL 106, §§ 9-501 to 527
- 950 CMR [Code of Massachusetts Regulations] 140.00 (concerning filing, acceptance of files and searching for filings)
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- Practical
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- Massachusetts
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- Other States
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- Perfection of the Security Interest – By Other Means
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- Synopsis
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- Some other types of collateral are not perfected through filing but by other means, e.g. deposits, by pledge (physical possession by SP), etc. Note that MGL, Chap. 90D, § 10 requires a notation of any security interest in an automobile on the certificate of title before perfection is complete.
- Secondary
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- Secured Transactions, Nutshell, pp. 151-196; Secured Transactions, Examples, pp. 143-180; Mass Practice, §§ 9:81-9:104
- Forms
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- Mass Practice
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- § 9-304-306 (forms dealing with control of collateral for non-filing perfection, e.g. by pledge, in proceeds, accounts, inventory )
- MCLE
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- Exhibit 7D, 7E (control agreements)
- Statutory
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- Uniform Commercial Code, §§ 9-309, 311 to 314; MGL, Chap. 106, §§ 9-309, 311-314, MGL, Chap. 90D, § 10.
- Priority
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- Synopsis
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- Many parties can have an interest in collateral, e.g. multiple perfected parties, bankruptcy trustees, judgment/lien creditors, etc. Once all parties are determined, Article 9 sets out rules of priorities in the various contests between all these parties seeking some form of default and enforcement. Any perfection subsequent to a bankruptcy filing will probably result in an unsecured creditor status.
- Secondary
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- Secured Transactions, Examples, pp. 237-262; Secured Transactions, Nutshell, pp. 309-394
- Forms
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- Mass Practice
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- § 9-306-312 (dealing with priorities for collateral in normal course of business, innocent parties, mechanic liens, debtor’s right in collateral, notice of priorities)
- § 9-313 (fixtures, co-mingled goods)
- Statutory
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- Uniform Commercial Code, §§ 9-102(52) & 9-317(a) [lien creditor], 9-322 [other secured parties], 9-324 [PMSI], 9-319 [cosignees], 9-320 [buyers in ordinary course of business], remainder section 3 [deals with certain collateral and situations]; MGL Chapt. 106, same sections as above
- Default, Enforcement and Sale
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- Synopsis
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- Even though the debtor and creditor presume that all payments on the debt will be paid, the creditor will always want a little more reassurance, hence this whole process and the creation of a security interest. Though unwelcome by either party, default can lead to repossession and sale of the collateral. This is the least preferred option, and creditors will often seek compromises with the defaulter. Creditors/SPs, also, will often seek Judgment Liens from a court based on the contractual promise so as to either allow the debtor to continue in business, or when the collateral sale price fails to cover the amount due. Most repossessions and resales are a private, non-court matters.
- Secondary
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- Secured Transactions, Nutshell, pp. 439-500; LoPucki, pp. 885-920; Mass Practice, §§ 9:221 to 9:226; Secured Transactions, Examples, pp. 363-424, Repossessions (most of it).
- Forms
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- Mass Practice
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- § 9-501-507 (defining default, notification to pay secured party from defaulted accounts receivable debtor, rights to possession upon default, conduct of secured party in disposition of collateral).
- Repossessions (most of the forms at the back, includes sample deficiency action claims)
- Statutory
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- Uniform Commercial Code, §§ 9-601 to 9-627
- MGL Chap. 106; MGL Chap. 255; M.G.L. c. 93; 209 CMR 18.00
- 15 USC § 1692 et seq (debt collection practices)
- Repossessions (lists all relevant Mass statutes on pp. 757-8)
- Practical
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- Repossession
- MGL Chap. 255 deals with methodology and rules for repossession of a consumer Article 9 transaction.
- Debt Collectors in general
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- Debt collector behavior is controlled by M.G.L. c. 93, §§ 24 to 28 and 209 CMR 18.00
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Payment Systems
- Basics of Negotiable Instruments/Form
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- Synopsis
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- Key points: Interest, Payable to Order, Bearer, Order or Promise, Dates, Joint and Several Liability.
- Secondary
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- MP, §§ 3:1 - 3:61; Secured Transactions, Nutshell, pp. 39-81; Secured Transactions, Nutshell, pp. 30-45; LoPucki, pp. 563-59
- Statutory
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- Uniform Commercial Code, §§ 3-101 to 3-119
- MGL, Chap. 106, §§ 3-101 to 3-119
- MGL, Chap. 271, § 49 (criminal usury)
- MGL, Chap. 140, § 90A (maximum interest in MA)
- Forms
Mass Practice
- § 3-104 (extensive and various basic negotiable instruments, e.g. drafts and notes)
- 3-105 (specifying a particular instrument is subject to another transaction)
- 3-106 (concerning interest rates, sum-certains, pre-payments, default)
- 3-107 – 3-122 (various other forms dealing with other negotiability requirements
- Transfer and Negotiation
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- Synopsis
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- To maintain “holder in due course” status for the present holder of the instrument, proper negotiation has to occur. Often this requires some form of endorsement.
- Secondary
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- Mass Practice, §§ 3:81 – 3:102; Payments Law, 83-102; Negotiable Instruments, pp. 169-250
- Forms
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- Mass Practice
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- §§ 3-201 – 3-207 (various forms of, and requirements for, endorsements)
- Holder in Due Course/Enforcement of Instruments
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- Synopsis
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- Requirements for HDC, who can enforce, has defenses, duties, rights, and accord and satisfaction, etc.
- Secondary
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- MP, §§ 3:121 – 3:157; Payments Law, pp. 129-138; Negotiable Instruments, pp. 253-386
- Forms
- Liability of Parties, Dishonor, Forgery, Dishonor and Payment
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- Synopsis
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- Refers to the liability of the signature on the instrument (not the underlining transaction), forgery, theft, alteration, presentment, dishonor and discharge.
- Secondary
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- MP, 3:181 – 3:276, Payment Systems, pp. 191-204, 273-319; Payments Law, pp. 29-139, 222-255, Negotiable Instruments, pp. 387-466, 491-530
- Forms
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- Mass Practice
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- §§ 3-401 – 3-419 (powers of attorney for endorsements, ratification of unauthorized checks, affidavits of forged signatures, disclaimers of warranty, acceptances, accommodations, guaranty)
- Check Collection System
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- Secondary
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- Payment Systems, pp. 169-223 (good clear overview of the check collection system with diagrams); Negotiable Instruments, pp. 387-466
- Forms
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- Mass Practice
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- §§ 4-103 – 4-210 (deposit slips, passbooks, collection agreements, routing slips, etc)
- Statutes
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- Check Clearing for the 21st Century Act, 12 USC §§ 5001-5018 (eliminating the need to return paper checks)
- Regulation J: Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire, 12 CFR 210
- Banks – Customer Relations
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- Synopsis
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- Includes things like Accounts, Bank Statements, etc under Article 4.
- Secondary
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- Mass Practice, §§ 4:1-4:73; Payment Systems, pp. 227-269, 321-334; Payments Law, pp. 192-94; Negotiable Instruments, pp. 467-490
- Statutory
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- 12 CFR 226, Truth in Lending federal regulations; Article 4
- Forms
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- Mass Practice, §§ 4-103 to 4-503 (signature cards, JTROS bank accounts, stop payment orders)
- Credit Card Systems and Letters of Credit
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- Secondary
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- Mass Practice, 5:1-5:24; Payments Law, pp. 347-395, 328-398
- Other
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- Lexis
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- Under Commercial Law/Treatises & Analytical Materials Tab, there is a Letters of Credit source which “clearly presents the controlling law, with full analysis of the revised UCC Article 5 and Uniform Customs and Practice and Practice for Documentary Credits.”
- Forms
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- Mass Practice
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- §§ 5-101 – 5-117 (commercial letters of credit, traveler’s checks, transfers and assignments, other provisions)
- Statutory
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- UCC
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- 15 U.S.C. § 1642 (dealing with credit cards), see the Consumer Protection Act in general, 15 U.S.C. § 1601 et seq
- Uniform Customs and Practice for Documentary Credits (promulgated by the International Chamber of Commerce, and has general universal effect throughout international commerce)
- Electronic Transfers
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- Secondary
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- Mass Practice, §§ 4A:1 – 4A:35; Payments Law, pp. 400-469
- Statutory
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- UCC
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- 15 USC 1693 et seq (electronic fund transfers under the Federal Consumer Credit Protection Act)
- 12 CFR 205 (federal regulations for electronic fund transfer
General Websites
http://www.federalreserve.gov/paymentsys.htm
http://www.federalreserve.gov/publications.htm (Federal Reserve websites that contains myriad sources and links on payment systems, e.g. official reports, consumer guides, and electronic check conversion, see in particular http://www.federalreserve.gov/pubs/checkconv/default.htm)
http://www.federalreserve.gov/pubs/consumerhdbk/ (Federal Reserve Credit Card consumer handbook).
http://www.mass.gov/ocabr/consumer/banks-banking/ (Massachusetts State consumer website on Banks and Banking).
http://www.mass.gov/ocabr/consumer/finance/credit-and-debt/ (Massachusetts State consumer website on Credit Cards).
http://www.federalreserve.gov/Regulations/ (Federal regulations in this area)
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