New YorkA 33072025-2026 Regular SessionHouseWALLET

Amends the Uniform Commercial Code to provide for emerging technologies

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Bill Overview

Analyzed Economic Effects

34 provisions identified: 7 benefits, 2 costs, 25 mixed.

Borrowers get signed accountings and releases

Lenders must sign covered debt accountings and proposals to accept collateral toward a debt. Accountings must detail unpaid debt using a balance date within 35 days before or after the record. Proposals must state the terms for accepting collateral as full or partial payment. After a borrower's signed demand, a lender must send a signed release within 10 days to a payment debtor previously notified of assignment. The release ends that payment debtor's further obligation to the lender.

Buyers and lessees avoid later loans

Buyers and lessees of goods gain protection against a lender’s claim for some later loans secured by those goods. Protection starts when the lender learns of the purchase or lease, or at the applicable 45-day mark, whichever comes first. For buyers, the clock starts at purchase; for lessees, it starts when the lease becomes enforceable. The amended rule also covers ordinary-course buyers and lessees, while retaining statutory exceptions.

Clearer debt explanations for consumers

For loans backed by consumer goods, lenders can offer electronic contact, but consumers do not have to use it. After selling the goods, lenders must explain any money left over or debt still owed in a record. The explanation is due within 14 days of sale or within 14 days after receiving a signed request. For a consumer who still owes money, the lender can instead send a debt-waiver record within 14 days of the request. Consumers get one free explanation every six months; fees for extra explanations are limited.

Debtors can reclaim electronic collateral control

Existing rights and duties for handling collateral now cover additional electronic-money and digital-payment control arrangements. The law requires transfer of covered electronic collateral to the debtor or a chosen recipient within 10 days after a signed demand. Covered assets include authoritative electronic payment-contract copies, electronic title documents, electronic money, and controllable electronic records. The transfer duty excludes records evidencing payment rights that the secured party bought.

Check writers can send electronic images

A check writer can issue a check by first sending its image and related information to the person being paid. That person must agree to receive it this way. The information must let a depositary bank collect it as an electronic check under federal law.

Digital transactions keep existing consumer protections

The law takes effect 180 days after enactment. Existing consumer protections still apply to transactions covered by the new digital-record rules. Secured-lending rules take priority when they conflict with those digital-record rules. New York’s electronic-record law does not weaken covered records or move them into negotiable-instrument rules, unless they say otherwise or predate the effective date. A qualifying designation in the record or recording system generally determines which jurisdiction’s law governs; otherwise, District of Columbia law applies. An effective agreement can choose another jurisdiction’s law for rules about paying and discharging covered obligations.

Lenders get clearer cross-border collateral rules

Electronic chattel paper uses an express jurisdiction designation, then system rules, then a governing-law statement, and otherwise the debtor’s location. For paper-only chattel paper, the authoritative copy’s location governs possession-based protection and priority; the debtor’s location governs filing. Controllable electronic records and payment rights they evidence generally use the record’s jurisdiction, while filing and specified automatic protection after a sale use the debtor’s jurisdiction. Existing protection can continue for up to four months after a relevant jurisdiction change, or one year after a qualifying transfer to a new debtor elsewhere. Protection ends sooner if it expires under the former jurisdiction’s law.

Destroyed paper checks still require payment

Destroying a paper check during image processing does not, by itself, cancel the obligation to pay it. This applies when the check’s information and image are later sent for payment. The rule preserves payment obligations even when banks do not retain the original paper check.

Creditors need signed sale-proceeds demands

Subordinate lienholders and consignors must make signed demands for collateral-sale proceeds before distribution is complete. When a consignor has an interest, a subordinate lienholder’s claim must rank ahead of that interest. Secured-party transfer statements must also be signed records, replacing the earlier authentication requirement.

Digital debt transfers change who gets paid

For controllable digital payment rights, payment to the record’s controller generally clears the debt. After a valid signed transfer notice, paying the former controller no longer clears it. The notice must identify the debt and new recipient and give a commercially reasonable payment method. Debtors can request proof through a commercially reasonable method agreed beforehand in a signed record; split-payment notices can be rejected, and specified rights cannot be waived. These rules replace specified assignment-payment rules, but other law can provide different treatment for personal, family, or household debts.

Electronic signatures and clearer contract terms

Covered records can be signed with an electronic symbol, sound, or process, with intent to approve or adopt them. Courts consider all circumstances when deciding whether someone should have noticed a contract term. A party harmed by an alleged breach can release a claim in a signed record without receiving anything in return. That makes releases easier to document, but the party gives up the rights released.

Lease records shape enforcement and claims

A record signed by the party facing enforcement, or an authorized agent, can establish a goods lease and its term. Enforcement is limited to the goods and term shown; the under-$1,000 exception remains, excluding payments for renewal or purchase options. Evidence generally cannot contradict terms in a record intended as the final agreement. A harmed party can give up lease-default or warranty claims without receiving payment by delivering a signed waiver. Adding a seal to a lease record or offer does not make sealed-instrument rules apply.

Mixed lease deals get divided rules

The law addresses single deals combining a goods lease with services, other goods, or other property. When the goods lease is the main part, commercial lease law applies, while other law can govern unrelated parts. When it is not the main part, only lease provisions mainly related to the goods lease apply. Specified finance-lease provisions also apply when the goods lease is a finance lease.

Signed records bind merchants and customers

A merchant’s signed promise to keep a goods sale or lease offer open is binding without payment for that promise. It lasts for the stated or reasonable time, capped at three months; promises on the recipient’s form need a separate signature. Sales and signed lease agreements can require signed records for changes or cancellation. On merchant-supplied forms, the other party must separately sign that requirement unless both parties are merchants. Records and notices can use usual communication methods to reasonable addresses, or count as sent when received within the proper sending time.

Bank customers face updated payment security

Covered payment orders can be oral or recorded, for a fixed or determinable amount, with no payment condition except timing. They must reach the bank through a recognized channel, and the sender must repay the bank. Security procedures can use biometrics, symbols, or sounds; signature checks or known contact details alone are not enough. An unauthorized order can bind the customer if the bank proves good faith and compliance with an agreed, commercially reasonable security procedure. An express agreement recorded by the bank can limit its right to collect or keep payment for such orders.

Buyers and sellers get updated contract rules

For goods sales of $500 or more, enforcement requires a sufficient record signed by the party being held to it. Enforcement covers only the quantity shown. In mixed deals, goods-sale rules apply broadly when goods predominate; otherwise, only rules mainly about the goods apply. Between merchants, a timely confirmation can satisfy the record requirement unless the recipient objects in a record within 10 days. Final agreement records limit evidence contradicting their terms, and adding a seal does not trigger sealed-contract rules.

Investors get updated holding control rules

Securities communications can use signed records or another transmission method agreed to by sender and recipient. Buyers can control rights in securities-account holdings through someone other than the transferor who acknowledges holding or obtaining control for them. That person need not acknowledge control, and acknowledgment alone generally creates no duty without an agreement or another law. Controllable electronic records and related payment rights are not automatically financial assets; the specific Article 8 exception must apply.

Lenders' claims can follow collateral proceeds

Limits on claims against later-acquired property do not block claims against qualifying proceeds involving consumer goods or business tort claims. The law also preserves the specified rule for consumer goods mixed with other goods. Lenders controlling newly covered electronic collateral can hold qualifying proceeds as additional security. Money or funds received from the collateral must reduce the secured debt unless returned to the borrower.

Payment senders face updated dispute rules

In covered disputes, banks can prove nonbank senders knew payment might follow account or bank numbers despite conflicting names. Signed records containing that warning satisfy the bank's proof burden; bank-number warnings must precede acceptance. Rejection notices can be oral or recorded and take effect when sent reasonably, or otherwise when received. Cancellation or change requests can also be oral or recorded, but must pass any agreed security procedure unless the bank agrees. Extra damages, including related losses, are recoverable only as provided in the receiving bank's express agreement evidenced by a record.

Asset location guides lenders' legal rights

Article 12's applicable-law rule joins the rules that govern covered transactions, subject to the general choice-of-law limits. For listed tangible collateral, location controls specified filing, protection, and competing-lender priority questions, subject to statutory exceptions. Deposit-account security interests follow the law of the bank's jurisdiction. That rule applies even when the transaction has no other connection to that jurisdiction.

Businesses can record letters of credit

Letters of credit and related confirmations, notices, transfers, changes, or cancellations can take any form that is a signed record. The law no longer lists a separate authentication requirement. A signed agreement among affected parties, or a provision in a party's undertaking, can choose the law governing specified liability. The chosen place need not have a connection to the transaction, so parties can be bound by another place's liability rules.

Digital buyers gain protection against liens

Buyers can avoid unperfected security interests by giving value, lacking knowledge of the interest, and completing the required acquisition steps. Chattel-paper buyers must receive every authoritative paper copy and control every electronic copy capable of control; electronic-document buyers must control every copy capable of control. Buyers of controllable digital records and payment rights must obtain control. Article 12 qualifying buyers—who obtain control for value, in good faith, and without notice—also gain protection against earlier claims, including perfected interests. Electronic-money recipients take free of security interests by obtaining control without colluding with the debtor to violate a lender’s rights.

Digital buyers gain stronger ownership protection

Buyers generally receive only the rights their seller had or could transfer, limited to the interest purchased. Qualifying buyers who gain control for value, in good faith, and without notice take covered digital records free of property claims. This protects those buyers from related claims, but limits prior holders’ ability to enforce their property rights. The protection also covers qualifying buyers of covered accounts and payment rights who control the record showing them. A filed financing statement alone does not count as notice of a property claim.

Document holders get electronic control rules

Electronic title-document systems must distinguish authoritative copies, identify holders, and give them exclusive powers over holder changes and control transfers. Control can also arise through another person's acknowledgment. Holder status for negotiable electronic title documents requires control, subject to the stated statutory exception. An acknowledgment generally creates no duty unless an agreement or another law does so. For covered paper instruments, title documents, and authoritative goods-payment records, delivery means voluntarily transferring possession.

Financial contracts get clearer jurisdiction rules

Specified securities matters use the issuer’s or securities intermediary’s local law, even without a connection to that place. Specified investment-collateral rules also apply without a connection to the jurisdiction they identify. For letters of credit, a bank branch’s location is the address in its undertaking; multiple addresses use the issuing address. Branches count as separate legal entities for specified governing-law and jurisdiction purposes. Negotiable instruments can name their governing law and require related disputes to be resolved in a named forum.

Goods financing gets electronic record rules

The law updates which recorded goods-backed payment rights count as chattel paper, a special financing asset. Recorded lease payments qualify when the deal mainly gives the lessee possession and use of goods. Vessel-use contracts and credit or charge card payments are excluded. Buyers control electronic chattel-paper copies through systems that reliably identify them as the assignee. Systems using authoritative copies must identify those copies and provide the required powers over assignee changes and control transfers.

Lenders can secure more electronic assets

Recorded payment rights qualify as controllable accounts or payment rights when the debtor promises to pay whoever controls the electronic record. Controllable electronic records also fall within the broader general-intangible asset class. Lenders can establish enforceable claims through control of listed electronic assets when value is given and the debtor has transferable rights. Control must follow the debtor's security agreement; goods-payment records require the specified possession-and-control route. Electronic-form money that cannot meet the control standard is excluded from the secured-transactions definition of money, and special rules govern value in Articles 3, 4, 5, and 12.

Lenders gain control of digital collateral

Lenders can protect claims on controllable digital records and related payment rights by filing or taking legal control. Control gives priority over competing lenders without control and lasts only while control continues. Electronic money requires control; physical money requires possession. Electronic-money control requires access to substantially all benefits, exclusive powers over access and transfers, and an identifiable controller; shared or delegated control has limits. Electronic exchange records from systems operating before government adoption are excluded from the law’s definition of money.

Lenders get a limited transition period

The act takes effect 180 days after enactment; its adjustment date is one year after that effective date. Earlier valid transactions and rights remain, subject to transition rules; revised secured-transaction and digital-record rules also cover earlier interests. Proceedings started before the effective date are unaffected. Previously perfected claims stay protected if they meet revised requirements; otherwise protection ends at the earlier old-law expiration or adjustment date. Previously enforceable but unperfected claims remain enforceable through adjustment, and specified earlier actions can satisfy revised requirements.

Lenders get updated account control options

A borrower, lender, and bank can sign a record allowing the bank to follow the lender's account instructions without further borrower consent. Someone other than the borrower can also acknowledge holding or obtaining control for the lender. People controlling covered accounts, goods-payment records, or electronic money do not have to acknowledge control for another person. An acknowledgment alone does not create duties or require confirmation to others unless an agreement or another law requires it.

Lenders must hold all contract copies

Chattel paper records a payment obligation tied to specific goods, such as financed purchases or leases. Lenders can protect their claims by holding every authoritative paper copy and controlling every authoritative electronic copy. Protection starts only after both steps and lasts only while both continue. Buyers giving new value can outrank competing claims, subject to good-faith, ordinary-business, knowledge, and assignment-marking requirements. Assignment-restriction rules also cover negotiable instruments that evidence chattel paper.

New digital control rules for lenders

Control of a covered digital record requires substantially all its benefits and exclusive powers to block others and transfer control. The controller must also be able to identify itself as holding those powers. Another person can acknowledge holding or obtaining control on the controller’s behalf. Nobody must make that acknowledgment, and it creates no duty unless an agreement or another law says otherwise. Lenders also owe a duty when covered digital collateral, related records, and recording systems lack a debtor’s identity or contact information. This duty applies when the lender knows of that gap at the later of gaining control or securing the debt.

Older digital claims face priority changes

Revised rules generally determine which competing collateral claim comes first, while previously established priorities remain during the transition. One year after the effective date, revised rules replace older priorities for Article 12 digital property and electronic money where they differ. A related transition covers Article 12 property outside the secured-transaction priority rules.

Protected business groups gain legal recognition

A protected series within an entity can count as a person under New York commercial law. It must be established under another law that limits creditors’ access to its assets, either directly or after stated conditions. This recognition affects how commercial rights and claims apply; it does not itself create a household payment.

Sponsors & Cosponsors

Sponsor

Alex Bores
Democratic • House

Cosponsors

Alicia Hyndman
Democratic • House
Nader Sayegh
Democratic • House
Rodneyse Bichotte Hermelyn
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 204 • No: 1

House vote • 6/11/2025

Assembly floor vote

Yes: 146 • No: 0

Senate vote • 6/11/2025

FLOOR Vote

Yes: 58 • No: 1

Actions Timeline

SIGNED CHAP.579
12/5/2025House
DELIVERED TO GOVERNOR
12/1/2025House
RETURNED TO ASSEMBLY
6/11/2025Senate
PASSED SENATE
6/11/2025Senate
3RD READING CAL.987
6/11/2025Senate
SUBSTITUTED FOR S1840A
6/11/2025Senate
REFERRED TO RULES
6/11/2025Senate
DELIVERED TO SENATE
6/11/2025House
PASSED ASSEMBLY
6/11/2025House
ORDERED TO THIRD READING RULES CAL.607
6/11/2025House
RULES REPORT CAL.607
6/11/2025House
REPORTED
6/11/2025House
REPORTED REFERRED TO RULES
6/4/2025House
PRINT NUMBER 3307A
5/7/2025House
AMEND AND RECOMMIT TO JUDICIARY
5/7/2025House
REFERRED TO JUDICIARY
1/27/2025House

Bill Text

Amendment A
5/7/2025
PDF
Original
1/27/2025
PDF

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