All Roll Calls
Yes: 117 • No: 1
UtahH.B. 4742026 General SessionHouseWALLET
Uniform Commercial Code Modifications
Sponsored By: Anthony E. Loubet (Republican)
Signed by Governor
BusinessCommerce and TradeContracts and Obligations
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Bill Overview
Analyzed Economic Effects
20 provisions identified: 7 benefits, 0 costs, 13 mixed.
Stronger repossession and sale protections
Beginning May 6, 2026, secured parties must send a reasonable signed notice before selling collateral, with extra details for consumer goods. You get one free explanation of any surplus or deficiency every six months, and the lender must answer in 14 days; extra responses can cost up to $25. Sale cash pays costs first, then the debt; you get any surplus unless the deal was a sale of accounts or similar. In consumer deals, lenders cannot accept collateral for partial satisfaction. If they hold your goods and you paid 60% of the cash price or principal, they must sell within 90 days unless you sign for more time. You cannot waive key post‑default rights before default, and broad after‑acquired property clauses usually do not cover most consumer goods beyond 10 days.
Letters of credit go electronic, choose law
Letters of credit and related actions can be issued as signed electronic records. Parties can pick the governing law in a signed record; if not, the law of where the party is located applies. For these rules, each bank branch is treated as a separate legal entity.
Electronic assets now work as collateral
The law treats controllable electronic records, controllable accounts, and controllable payment intangibles like other collateral. You can perfect interests by filing, possession, or control, depending on the asset, and perfection by control starts only when control begins and ends when it stops. It lists control or possession methods that replace filing for certain assets, and clarifies perfection by possession with third‑party acknowledgments. Protected and qualifying purchasers keep priority, and a good‑faith transferee who gets control of electronic money takes it free of prior interests.
Fixture filings keep early priority
A perfected interest in fixtures has priority if you make a fixture filing before the goods become fixtures or within 20 days after. The law keeps other priority rules, including those for construction mortgages and purchase‑money security interests.
Stronger protections for securities buyers
The issuer’s law governs a security’s validity and transfers. The securities intermediary’s law governs the rights between the intermediary and the entitlement holder. The law explains how to pick that jurisdiction by agreement or office location. Buyers can be protected purchasers when they give value, have no notice of an adverse claim, and get control. For some land or water company shares, they must also have paid or used water or paid assessments for four of the last seven years.
Which state’s law governs collateral
The law clarifies which state’s rules decide perfection and priority. For investment property: the place of the paper certificate controls certificated securities; the issuer’s law controls uncertificated ones; the intermediary’s jurisdiction controls securities accounts. For electronic chattel paper, the jurisdiction comes from the electronic record or system rules, or the debtor’s location; filing follows the debtor’s jurisdiction.
Faster lien releases after you pay
Beginning May 6, 2026, when you owe nothing and the lender is not committed to lend more, a signed demand triggers action within 10 days. The lender must release or transfer deposit‑account balances, transfer control of electronic money and controllable records, and return control of electronic chattel paper or documents. If an account debtor got notice of an assignment, the lender must send a release within 10 days after your signed demand. You can get one free accounting or list of collateral every six months; replies are due in 14 days. Extra responses can cost up to $25. The lender must file a termination within one month after payoff or within 20 days after your signed demand. Lenders generally owe duties only to debtors they know and can contact; they may charge reasonable custody costs, and money taken from collateral must reduce your debt.
New rules for leases and rent-to-own
Lease changes do not need new payment to be binding. If your lease says changes require a signed record, only a signed record works. Rental‑purchase agreements covered by this chapter are exempt from most security‑interest rules and much of the Consumer Credit Code; some sections still apply to lessors. In consumer credit sales that do not involve real property, sellers cannot take a negotiable instrument other than a check as proof of your debt. A person can also release a breach claim by signing a written record, even without new consideration.
New rules for bank transfers and errors
If you and your bank use a security procedure, a verified wire is treated as your order when the bank followed that procedure in good faith. You can block the bank from keeping a payment if you prove it was not caused by a trusted agent or an intruder who got access. Banks may rely on identifying numbers; senders may owe the bank losses from that reliance, with extra notice rules for non‑bank senders. If a beneficiary name and account number do not match, the bank can pay by number if it did not know of the mismatch. If a bank fails to execute a transfer and you did not get a rejection that day, it must pay you interest until you are told or the order is canceled. You can cancel or amend a payment order only in time for the bank to act; unaccepted orders cancel after five funds‑transfer business days.
New rules for deposit accounts as collateral
Lenders have more ways to control a borrower’s bank account, including by being the bank, becoming the bank’s customer, or using a third party’s acknowledgment. A bank’s rights and duties for an account do not change just because a security interest exists, unless the bank signs an agreement to change them. The law of the bank’s chosen jurisdiction governs perfection and priority; if none is chosen, other set rules decide which state’s law applies.
Notices, filings, and title updates after default
Beginning May 6, 2026, you must have the debtor’s signed OK to file an initial financing statement or add collateral. Non‑consumer sale notices are sufficient if they include standard items; using the prescribed form with minor harmless errors is okay. After default, a secured party’s signed transfer statement must be accepted by officials, who must update records and issue a new title when due. A secured party proposing to accept collateral must notify claimants and perfected parties from the 10‑day lookback, and any secondary obligor if the acceptance is partial.
Receivable assignments easier; payer rights clearer
Starting May 6, 2026, contract terms that block or penalize assigning promissory notes or creating/perfecting a security interest are ineffective to that extent. An assignee takes subject to the original contract and to defenses that arise before the payer gets a signed assignment notice. Until a payer gets a signed notice, paying the original party still discharges the debt; special rules apply to consumer debtors and health‑care insurance receivables, and controllable accounts/payment intangibles are excluded from some notice rules.
Who gets money after collateral sales
Starting May 6, 2026, cash from collections goes first to reasonable expenses (including attorney’s fees), then to the secured debt, then to subordinated interests that made a timely signed demand. The debtor gets any surplus and the obligor owes any deficiency, except in sales of accounts, chattel paper, payment intangibles, or notes, where there is no surplus or deficiency. Secured‑party rights after default are cumulative, and liability to unknown debtors or obligors is limited, with exceptions when the secured party takes control knowing identity details are not provided by the system.
New rules for digital asset control
Beginning May 6, 2026, the law creates a chapter for controllable electronic records. It defines when someone has control of a transferable record, electronic chattel paper, electronic money, and other controllable records, often by keeping one authoritative copy and exclusive power to transfer it. For mixed paper and electronic chattel paper, a secured party must hold every paper copy and control every electronic copy. Control of the record also counts as control of the account or payment right it shows. "Money" under the code does not include a central bank digital currency. A person who controls collateral does not have to say they hold it for someone else and usually owes no duty without an agreement.
Sales rules in mixed goods-services deals
The sales chapter applies to transactions in goods and sets rules for hybrid deals. If the goods part does not predominate, only goods‑focused rules apply; if it does, the sales chapter applies without displacing the other law for services or non‑goods parts. The law does not cover deals that only create a security interest and does not override consumer‑protection statutes.
Which law and priority rules apply
Beginning May 6, 2026, the record’s own jurisdiction generally governs perfection and priority for controllable electronic records and the payment rights they show. Perfection by filing and automatic perfection from a sale still follow the debtor’s state. Security interests that existed before May 6, 2026 stay enforceable or perfected only until their old lapse date or an adjustment date unless updated to meet the new rules. Priority fights set before May 6, 2026 keep the old order until the adjustment date. On the adjustment date, amended rules in Chapters 9a and 12 can change who has priority for Article 12 property and electronic money.
Safer, faster electronic check payments
The law tightens payment security. A security procedure can be biometrics, encryption, codes, or callbacks. Checking only a signature, email, IP, or phone is not enough. A bank demand draft that meets the rules is treated like a check. If the payee agrees, sending the first image and data of a check counts as issuing it.
Beer distribution contract terms clarified
The law defines beer distributorship agreements and treats related side deals as part of the agreement. It defines a supplier as a brewer or other seller to a wholesaler and ties good faith to the UCC standard.
Cleanup of old rules and titles
Beginning May 6, 2026, the law repeals older provisions that conflict with these updates and removes prior transition sections. It keeps other laws on the form of documents of title and on bailees in place, but breaking those laws does not change a document’s status under Chapter 7a.
New terms for notes and check discharge
Negotiable instruments may state which law applies and may select a forum for disputes. A person owed on an instrument can discharge it by surrender, destruction, cancellation, or a signed renunciation. Destroying a check only to make an image does not cancel the duty to pay.
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Sponsors & Cosponsors
Sponsor
Anthony E. Loubet
Republican • House
Cosponsors
Kirk A. Cullimore
Republican • Senate
Roll Call Votes
Senate vote • 3/5/2026
Senate/ passed 2nd & 3rd readings/ suspension
Yes: 23 • No: 0
Senate vote • 3/5/2026
Senate/ circled
Yes: 0 • No: 0
Senate vote • 3/5/2026
Senate/ uncircled
Yes: 0 • No: 0
House vote • 2/27/2026
Senate Comm - Favorable Recommendation
Yes: 6 • No: 0
House vote • 2/23/2026
House/ passed 3rd reading
Yes: 71 • No: 1
House vote • 2/13/2026
House Comm - Substitute Recommendation
Yes: 8 • No: 0
House vote • 2/13/2026
House Comm - Favorable Recommendation
Yes: 9 • No: 0
Actions Timeline
Governor Signed
3/23/2026House/ to Governor
3/16/2026HouseHouse/ received enrolled bill from Printing
3/16/2026HouseHouse/ enrolled bill to Printing
3/12/2026HouseEnrolled Bill Returned to House or Senate
3/12/2026Draft of Enrolled Bill Prepared
3/10/2026Bill Received from House for Enrolling
3/10/2026House/ signed by Speaker/ sent for enrolling
3/6/2026HouseHouse/ received from Senate
3/6/2026HouseSenate/ to House
3/5/2026SenateSenate/ signed by President/ returned to House
3/5/2026SenateSenate/ passed 2nd & 3rd readings/ suspension
3/5/2026SenateSenate/ uncircled
3/5/2026SenateSenate/ circled
3/5/2026SenateSenate/ 2nd & 3rd readings/ suspension
3/5/2026SenateSenate/ Rules to 2nd Reading Calendar
3/5/2026SenateSenate/ 2nd Reading Calendar to Rules
3/4/2026SenateSenate/ placed on 2nd Reading Calendar
2/27/2026SenateSenate/ committee report favorable
2/27/2026SenateSenate Comm - Favorable Recommendation
2/27/2026Senate/ to standing committee
2/25/2026SenateSenate/ 1st reading (Introduced)
2/24/2026SenateSenate/ received from House
2/23/2026SenateHouse/ to Senate
2/23/2026HouseHouse/ passed 3rd reading
2/23/2026House
Bill Text
Enrolled
3/12/2026
Substitute #1
2/12/2026
Introduced
2/3/2026
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