All Roll Calls
Yes: 226 • No: 0
ArkansasHB17462025 Regular SessionHouse
TO AMEND THE UNIFORM COMMERCIAL CODE.
Sponsored By: Tyler Dees (Republican), Matt Brown (Republican)
Enacted
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Bill Overview
Analyzed Economic Effects
41 provisions identified: 9 benefits, 2 costs, 30 mixed.
Buyers and lessees avoid later liens
Beginning September 1, 2026, goods buyers gain protection against collateral claims securing certain later loan advances. Protection covers advances made after the creditor learns of the purchase or 45 days after purchase, whichever comes first. Goods lessees receive similar protection for their leasehold interest. Their cutoff is creditor knowledge or 45 days after the lease becomes enforceable, whichever comes first.
Consumers get clearer collateral sale explanations
Beginning September 1, 2026, lenders can offer optional electronic ways to ask about sales of consumer goods pledged for loans. The notice form includes an explanation-charge item only when the specified explanation option is offered and another written explanation carries a charge. Explanations of leftover sale money or remaining debt, and demands for remaining debt, can use paper or electronic records. Consumers must request an explanation through a signed record, and lenders must respond within 14 days. For a consumer responsible for remaining debt, the lender can instead send a record giving up that debt claim.
Debtors gain digital collateral safeguards
Beginning September 1, 2026, debtors can demand required releases or return of covered collateral control through a signed demand. The lender's deadline is 10 days after receiving it. Covered assets include electronic chattel-paper records, title documents, electronic money, and controllable electronic records. Lenders have duties and narrower liability protections when they know covered digital records lack specified debtor or obligor identity or contact information. That knowledge is measured when control begins or the security interest attaches, whichever is later.
Check users get electronic payment options
Beginning September 1, 2026, sending a check image counts as issuing the check when the payee agrees. The image and details must let a bank collect the check electronically under federal law. Destroying the paper during imaging does not cancel payment when the image and details are later sent for payment. Payment instruments can also name governing law or a dispute forum without losing negotiable status, provided other requirements remain satisfied.
Digital asset buyers gain claim protection
Beginning September 1, 2026, qualifying buyers gain priority protections for controllable electronic records and linked accounts or payment rights. A buyer who obtains control for value, in good faith, and meets the qualifying-purchaser standard can take free of prior property claims. These protections can defeat an earlier security interest even when that interest was perfected.
Businesses gain flexible letter-of-credit records
Beginning September 1, 2026, letters of credit and related confirmations, transfers, changes, and cancellations can use any signed record. Parties can select the law governing covered letter-of-credit liability, even from a place unrelated to the deal. The choice must appear in a recorded agreement signed by affected parties or in the relevant undertaking.
Debtors can demand assigned payment releases
Beginning September 1, 2026, a debtor can demand a release after a payer receives notice of assignment to a secured creditor. The debtor's demand must be signed. The creditor must send the payer a signed release within 10 days after receiving the demand. The release ends the payer's further obligation to that creditor.
Junior creditors can claim collateral proceeds
Beginning September 1, 2026, junior lienholders can claim covered collection proceeds through a signed demand received before distribution ends. Signed demands also govern covered collateral-sale claims by junior lienholders and consignors. Separate authentication is no longer required. When a consignor has an interest, a junior lienholder's sale-proceeds claim qualifies under this rule only if senior to that interest.
Lenders gain clearer electronic asset control
Beginning September 1, 2026, electronic-money control requires identifiable powers to obtain nearly all its benefit, exclude others, and transfer control. Electronic title-document systems must identify authoritative copies and their holders, with exclusive powers over holder identification and control transfers. The law allows shared powers as specified and control through an acknowledging third party who is not the transferor. Lenders control covered accounts or payment rights by controlling the electronic record that evidences them.
Electronic money buyers lack general protection
Beginning September 1, 2026, electronic money is excluded from a general protection for buyers of listed collateral. That rule lets buyers take certain property free of a creditor's unperfected security interest. Buyers of electronic money cannot rely on that general rule.
Document holders face narrower rights
Beginning September 1, 2026, controlling a negotiable electronic title document does not always give a person holder rights. Control under the specific exception in Arkansas Code § 4-7-106(g) does not qualify. For instruments, paper title documents, and official paper copies of goods-backed payment records, delivery means voluntarily transferring possession.
Borrowers face clearer creditor transfer rules
Beginning September 1, 2026, covered debtors can pay the original creditor until receiving an effective signed notice identifying transferred rights. After notice, payment to the new creditor clears the obligation; receipt also sets the cutoff for specified claims and defenses. Related proof and payment-allocation rules use signed notices, but listed payment, proof, and partial-payment rules exclude controllable accounts and payment rights. Rules overriding assignment restrictions also cover negotiable notes that evidence debts secured by goods.
Borrowers face rules for keeping collateral
Beginning September 1, 2026, required borrower and lender consents, and objections to keeping collateral as payment, must be signed. Borrowers have 20 days after a full-payment proposal is sent to object. In consumer transactions, lenders cannot keep collateral as only partial payment of the secured debt. Waivers of sale notice rights or rights to require a sale need an agreement signed after default. The right to reclaim collateral by paying the secured debt can be waived this way only outside consumer-goods transactions.
Borrowers get account and lien deadlines
Beginning September 1, 2026, borrowers must sign requests for account or collateral information and identify the transaction. The creditor must answer within 14 days. One response every six months is free; extra responses can cost up to $25 each. A signed demand also triggers covered duties to end a filed collateral claim when the law's termination requirements are satisfied. The creditor must send or file the termination statement within 20 days after receiving that demand.
Clearer rules for goods and services
Beginning September 1, 2026, goods-sale rules cover a mixed deal when the goods-sale part is its main focus. Otherwise, only rules mainly related to the goods sale apply; other law can still govern unrelated parts. Earlier or same-time oral agreements cannot contradict a record intended as the final agreement. Business practices and consistent extra terms can explain or supplement it, unless the court finds it complete and exclusive.
Debtors get signed collateral remedy records
Beginning September 1, 2026, lenders must send reasonable signed sale notices to people entitled to notice. Sending notice to the debtor and any secondary obligor establishes the notification date. Notice is not required for perishable collateral, fast-declining collateral, or collateral customarily sold on a recognized market. After default and use of remedies, a lender's signed transfer statement documents acquisition of the debtor's collateral rights. An offer to accept collateral for full or partial debt payment must also be signed and state its terms.
Electronic signatures and clearer contract notices
Beginning September 1, 2026, electronic symbols, sounds, or processes count as signatures when the signer intends to approve the record. Commercial notices count as sent through usual methods with costs covered and a reasonable address, or through timely receipt. Courts judge whether contract terms are noticeable based on all the circumstances. A person can give up a breach claim through a signed record without receiving anything in return.
Signed records support goods lease contracts
Beginning September 1, 2026, goods lease rules recognize signed records instead of only paper writings. A lease generally needs a signed record describing the goods and lease term, unless total payments are below $1,000. Existing exceptions remain, and record-based rules also cover final agreements, seals, and limits on contract changes. A merchant's signed promise to hold a lease offer open lasts no more than three months and needs a separate signature on the other party's form. Giving up rights after default requires a signed record delivered by the injured party.
Bank customers face payment security tradeoffs
Beginning September 1, 2026, agreed bank security checks can use symbols, sounds, or biometrics. A signature match or known email, internet address, or phone number alone is not enough. An unauthorized order can bind the customer if the bank proves good-faith compliance with commercially reasonable checks and recorded customer restrictions. Customers who reject a reasonable bank procedure can expressly agree in a record to bear unauthorized orders under their chosen procedure. Banks need not follow instructions that conflict with a recorded agreement or arrive too late for reasonable action.
Bank customers get flexible payment communications
Beginning September 1, 2026, payment orders can be oral or recorded and must specify a fixed or determinable amount. Only timing can be a payment condition; the sender must reimburse the bank and use a permitted transmission route. Banks can reject orders orally or in a record stating they will not execute or pay them. An agreed rejection method controls unless another method causes no significant delay. Senders can request changes or cancellation orally or in a record, but an existing security procedure requires verification or bank agreement.
Bank payment disputes keep limited remedies
Beginning September 1, 2026, banks and senders can expressly agree in a record to limit banks' collection or retention of payment. A bank that fails to execute a payment it expressly agreed to execute owes transaction expenses, incidental expenses, and resulting interest losses. Additional damages are available only as provided in the bank's express recorded agreement. For name-and-number mismatches, a sender's signed record can prove the bank gave notice before acceptance. Nonbank senders must still prove required facts, including that a numbered beneficiary was not entitled to payment in beneficiary-mismatch disputes.
Creditors gain another bank account control
Beginning September 1, 2026, someone other than the debtor can acknowledge holding or obtaining bank account control for a creditor. The bank's jurisdiction governs competing security interests, even when the transaction has no connection there. A security interest, the bank's knowledge, or creditor instructions alone do not change the bank's rights or duties. The bank must agree to that change in a signed record.
Business and livestock lenders need notices
Beginning September 1, 2026, lenders financing purchases of inventory or qualifying livestock need signed notices for the specified priority over competing claims. Their claims must be perfected when the borrower receives the goods. Competing creditors must receive inventory notices within five years before possession, or livestock notices within six months before possession. Each notice must describe the goods and state the lender's existing or expected purchase-financing claim.
Protected business units gain legal recognition
Beginning September 1, 2026, a protected series of a business can count as a person under the commercial code. The series must be created under another law that limits creditors' ability to collect claims from its assets. This also applies when that other law makes the asset limits depend on specified conditions.
Signed records support goods sales contracts
Beginning September 1, 2026, goods contracts priced at $500 or more generally need a signed record for enforcement. Exceptions remain for specially made goods, court admissions, and accepted payment or goods. Between merchants, a qualifying confirmation binds the recipient unless they object in a record within 10 days. A merchant's signed promise to keep an offer open lasts for the stated or reasonable time, up to three months. Promises on the other party's form need a separate signature; agreements requiring signed changes recognize signed records.
Bank branches count separately in disputes
Beginning September 1, 2026, each bank branch counts as a separate legal entity for specified legal questions. These include court authority, governing law, and recognition of letters of credit between branches. A branch's location is the address in its commitment. If several addresses appear, the issuing address controls. This separate-branch treatment does not apply to enforcing a court judgment.
Buyers gain protection from creditor claims
Beginning September 1, 2026, buyers can acquire specified collateral free of a creditor's security interest. They must give value without knowing about that interest, before the creditor completes the steps that legally protect it. Buyers must also meet delivery or control requirements; for secured payment records, this includes every authoritative paper and electronic copy. Recipients of electronic money take it free of a security interest by gaining control without colluding with the debtor. These protections limit creditors' claims against the transferred property.
Control gives digital lenders first claim
Beginning September 1, 2026, control gives a secured creditor priority over a competing secured creditor without control. This rule covers controllable electronic records and the controllable accounts or payment rights tied to them. Creditors without control take a lower place in line for that collateral.
Creditors gain rights and control duties
Beginning September 1, 2026, covered collateral rights and duties extend to creditors controlling additional electronic assets. Creditors with possession or qualifying control can keep non-money proceeds as added security. They can apply money or funds to the debt unless they send them to the debtor. Third parties need not acknowledge control for someone else. An acknowledgment alone creates no duty to that person or duty to confirm it to others, unless an agreement or outside law requires one.
Cross-border collateral claims get clearer rules
Beginning September 1, 2026, special rules choose the governing law for controllable electronic records in covered cross-border deals. Contrary agreements work only as far as that chosen law allows. For specified collateral questions, location governs listed physical assets, but not paper records of goods-backed debts. Listed investment-property rules apply even without a transaction connection to the chosen jurisdiction. Existing protected claims on listed financial and electronic collateral survive a jurisdiction change until former-law protection ends or four months pass, whichever comes first.
Debtors get digital payment transfer rules
Beginning September 1, 2026, valid signed notices redirect payments on controllable accounts or payment rights to the new holder. Notices must identify the obligation, state that control transferred, identify the new holder, and give a commercially reasonable payment method. Before notice, the payer and current holder must agree in a signed record on a commercially reasonable proof method. After valid notice, paying the former holder no longer clears the debt. But payers requesting reasonable proof can keep paying the former holder until proof arrives. Notices requiring divided or multiple-method payments can be ineffective, and other law can set different rules for personal or household debts.
Digital asset claimants face priority changes
Beginning September 1, 2026, amended secured-transaction rules determine which competing collateral claims rank first. Earlier rankings generally remain governed by prior law. Rankings for controllable-record property or electronic money stop applying that day to the extent the new law changes them. When secured-transaction priority rules do not apply, the controllable-record chapter decides competing claims to its covered property.
Digital asset holders face new classifications
Beginning September 1, 2026, controllable payment rights join the commercial-code category called payment intangibles. The law also defines electronic money and controllable electronic records. Central bank digital currency does not count as money or a deposit account under these rules. For secured transactions, money excludes deposit accounts and electronic money that cannot meet the law's control test. Controllable accounts, records, and payment intangibles generally fall outside securities-law financial assets, except where the stated statutory exception applies.
Digital record holders get legal location rules
Beginning September 1, 2026, a controllable electronic record's legal location determines the law governing matters covered by this framework. Express statements in the record or its system rules determine that location. The District of Columbia is the default when none of those statements applies. An effective agreement can choose another jurisdiction's law for records showing controllable accounts or payment rights.
Existing lenders face transition compliance deadlines
Beginning September 1, 2026, amended secured-transaction and controllable-record rules reach older interests, subject to transition protections. Earlier valid transactions generally remain valid and enforceable under prior law; cases begun before that date are unaffected. Existing enforceable, perfected interests retain perfection automatically if they meet the new requirements; otherwise protection ends at the earlier prior-law expiration or September 1, 2027. Previously enforceable but unperfected interests remain enforceable until September 1, 2027, and afterward must satisfy the new requirements. Older filings must meet new requirements; other earlier actions require timely attachment and new-law perfection before the adjustment date.
Investors get clarified custody and communications
Beginning September 1, 2026, covered securities communications can use signed records or a transmission method both sides agree to. Buyers gain control of rights held through a securities intermediary when a non-transferor controls them and acknowledges holding control for the buyer. That person need not acknowledge control, confirm it to others, or take on duties unless an agreement or another law requires them. For specified securities matters, the issuer's or intermediary's jurisdiction governs even without a connection to the deal.
Lenders get revised payment-right categories
Beginning September 1, 2026, commercial accounts include controllable accounts and health-insurance receivables, but exclude payment rights evidenced by instruments. Someone owing a negotiable instrument is not an account debtor, even when the instrument evidences chattel paper. Chattel paper covers recorded payment rights secured by specific goods and recorded lease payments mainly for possessing and using goods. It excludes vessel-use and credit- or charge-card payment rights. These financing categories do not change eligibility for health coverage or benefits.
Mixed goods leases get clearer rules
Beginning September 1, 2026, the law sets rules for deals combining goods leases with services or other property. When the goods lease is the main part, the lease chapter applies to the deal. Other law can still govern its non-goods parts. When the goods lease is not the main part, only rules mainly about that lease apply. Two specified finance-lease rules still apply to the extent the law directs.
New collateral rules for secured loans
Beginning September 1, 2026, enforceable collateral claims require value, debtor rights, and a signed agreement or allowed possession or control arrangement. Control-based options cover listed electronic records, payment rights, documents, and money; goods-backed payment records can require possession and control together. Limits on later-acquired property do not block claims on qualifying proceeds or goods mixed together. Financing filings need signed debtor authorization or a legal alternative; a security agreement authorizes filings for described collateral and specified proceeds. Special chapter rules override the general meaning of giving value for checks, bank collections, letters of credit, and controllable records.
New control rules for financed goods
Beginning September 1, 2026, control rules cover electronic records of debts secured by goods, known as chattel paper. The system must identify official copies and the buyer, and give the buyer specified powers to prevent reassignment and transfer control. Another person, other than the transferor, can acknowledge holding or obtaining control for the buyer. Buyers seeking priority must possess each official paper copy or control each official electronic copy. Priority also depends on new value, good faith, ordinary business conduct, assignment markings, and knowledge of conflicting rights.
Property consent must support fixture claims
Beginning September 1, 2026, specified priority for loan claims on fixtures requires a signed record. Fixtures are goods attached to real property. The property owner or another party with a property claim must sign consent to the lender's security interest. Alternatively, that party can sign a record disclaiming an interest in the goods as fixtures.
Sponsors & Cosponsors
Sponsors
Tyler Dees
Republican • Senate
Matt Brown
Republican • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 4/15/2025
House Vote - Tuesday, April 15, 2025 2:54:38 PM
Yes: 97 • No: 0
Senate vote • 4/10/2025
Senate Vote - Thursday, April 10, 2025 4:32:57 PM
Yes: 34 • No: 0
House vote • 3/20/2025
House Vote - Thursday, March 20, 2025 2:51:28 PM
Yes: 95 • No: 0
Actions Timeline
Notification that HB1746 is now Act 997
4/22/2025HouseCorrectly enrolled and ordered transmitted to the Governor's Office.
4/16/2025HouseTO BE ENROLLED
4/15/2025HouseSenate amendment # 1 read and concurred in.
4/15/2025HouseReturned by the Committee with the recommendation that it do pass, concur in Senate Amendment No. 1
4/14/2025HouseRe-referred to the Committee on INSURANCE & COMMERCE- HOUSE
4/10/2025HouseReturned from Senate as passed, as amended # 1
4/10/2025HouseReturned to the House as passed as amended # 1 .
4/10/2025SenateRead the third time and passed.
4/10/2025SenateRules suspended.
4/10/2025SenateReceded from Amendment No. 2
4/10/2025SenateAmendment # 2 read the first time, rules suspended, read the second time and adopted, ordered engrossed.
4/10/2025SenatePlaced on second reading for purpose of amendment.
4/10/2025SenateRules suspended.
4/10/2025SenateReturned by the Committee with the recommendation that it Do Pass as amended, Amendment # 2
4/10/2025SenateRe-referred to INSURANCE & COMMERCE - SENATE
4/9/2025SenateREPORTED CORRECTLY ENGROSSED
4/9/2025SenateAmendment # 1 read the first time, rules suspended, read the second time and adopted, ordered engrossed.
4/9/2025SenateWithdrawn from Committee and placed on 2nd reading for purpose of amendment # 1
4/9/2025SenateRules suspended.
4/9/2025SenateRe-referred to INSURANCE & COMMERCE - SENATE
4/8/2025SenateReturned by the Committee, with the recommendation that it Do Pass
4/3/2025SenateRead first time, rules suspended, read second time, referred to INSURANCE & COMMERCE - SENATE
3/20/2025SenateReceived from the House.
3/20/2025SenateRead the third time and passed and ordered transmitted to the Senate.
3/20/2025House
Bill Text
HB1746 - Introduced
3/11/2025
Act Version
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