OregonSB 1672025 Regular SessionSenate

Relating to the Uniform Commercial Code.

Sponsored By: Sponsor information unavailable

Signed by Governor

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

33 provisions identified: 7 benefits, 0 costs, 26 mixed.

Borrowers Get Signed Secured Debt Accountings

Lenders providing secured-debt accountings must sign the record and explain the unpaid obligations in reasonable detail. The balance date must be within 35 days before or after the record date. Lenders must respond to covered accounting or collateral-information requests within 14 days. Debtors receive one free response every six months; additional responses can cost up to $25 each.

Electronic notices for consumer collateral sales

Consumer-goods sale notices can offer electronic requests for explanations and an added electronic contact method. The statutory form still requires a phone number for explanation requests, plus phone or mailing contact for sale information. After a sale, consumers can request an explanation of extra proceeds or remaining debt through a signed record. Lenders can provide required explanations and their first demand for remaining debt in a record, rather than only on paper.

Protected business series gain commercial recognition

A protected series within a business can count as a person under Oregon's commercial code. It must be established under another law that limits creditors' access to the series' assets, including limits that depend on stated conditions. This recognizes qualifying series in commercial transactions; it does not itself create those asset protections.

Clearer lender rules for digital collateral

Controlling electronic money requires power to get almost all its benefit, exclude others, transfer control, and identify the controller. Another person can hold control on the controller’s behalf. A secured lender controls a controllable account or payment claim by controlling the electronic record showing that asset. For these assets and controllable electronic records, lenders owe duties to debtors or others owing payment when they know identifying and contact information is missing. That knowledge is measured at the later of gaining control or the security interest taking effect.

Clearer roles when lenders transfer rights

The law defines who gives and receives rights in specified secured transactions. These definitions cover creating security interests, transferring them between secured lenders, and selling specified payment rights or promissory notes. Covered sales include accounts, chattel paper, and payment intangibles.

Collateral Location Guides Lenders’ Legal Claims

The law where specified physical collateral is located governs certain filing and competing-claim questions. Covered property includes goods, negotiable paper title documents, payment instruments, and physical money. The rule covers specified fixture filings, timber-to-be-cut filings, and the effect and priority of security interests held without possession. Tangible chattel paper is removed from this location-based rule.

Electronic signatures count in commercial agreements

Electronic symbols, sounds, or processes count as signatures when a person intends to approve or authenticate the record. Someone entitled to enforce a payment instrument can release its debt through a signed record. Courts consider all circumstances when deciding whether a contract term stands out enough for a reasonable person to notice. Notices must use a reasonable address with delivery costs covered; alternative methods count if the notice arrives just as soon.

Borrowers keep limits on default waivers

Debtors and backup payers can waive specified collateral notices, disposal rights, or redemption rights only through agreements signed after default. Redemption—the right to reclaim collateral by satisfying the debt—cannot be waived in consumer-goods transactions. Specified lender liability limits do not apply for certain digital collateral when the lender knowingly lacks system-provided debtor identity and contact information. That exception concerns debtors or obligors present at the later of attachment or the lender gaining control, with knowledge tested then. Transfers made when a lender accepts collateral toward all or part of a debt lose specified protection against being set aside.

Signed Consent Governs Keeping Defaulted Collateral

A lender accepting collateral for partial debt repayment needs the debtor’s consent in a signed record after default. For full repayment, the debtor can sign consent after default. Alternatively, the lender can use the statutory proposal process with no objection within the applicable 20-day period. Partial-repayment proposals must also go to any secondary obligor and other required recipients. Separate consumer protections limit collateral acceptance, including a ban on partial acceptance in consumer transactions.

Borrowers Must Redirect Assigned Debt Payments

After valid signed notice identifying assigned payment rights and directing payment to the new holder, paying that holder clears the obligation. Paying the former holder does not. Account debtors retain covered defenses and claims that arose before receiving signed assignment notice. Controllable accounts and controllable payment intangibles are excluded from these ordinary payment, notice, proof, and related debtor-option rules. Rules invalidating specified transfer restrictions also cover negotiable instruments evidencing chattel paper as promissory notes, while statutory exceptions remain.

Electronic checks keep their payment duties

A sender's first transmission of a check image counts as issuing the check when the payee agrees. The image and related information must let the bank collect an electronic check under federal law. Destroying the paper check during imaging does not cancel the duty to pay when the image and information are later sent for payment.

Bank Transfer Security Shapes Customer Liability

Banks can accept spoken or recorded payment orders directing a fixed or determinable amount and meeting reimbursement and transmission requirements. Banks and customers can agree on security checks, including codes or biometrics; a known email, internet address, or phone number alone is insufficient. A bank following an agreed, commercially reasonable procedure in good faith can bind customers to unauthorized orders. Customers can also agree in a record to a chosen procedure after rejecting a reasonable bank-offered procedure. An express agreement in a record can limit the bank’s right to collect or keep payment for unauthorized orders.

Banks and brokers get jurisdiction rules

Specified investment and commodity collateral rules apply even when the transaction has no connection to the selected jurisdiction. A hierarchy using account agreements, account statements, and the intermediary's main office identifies a commodity intermediary's jurisdiction. Bank branches count as separate legal entities for jurisdiction, governing law, and recognition of interbranch letters of credit, but not judgment enforcement. A branch's undertaking sets its location; if it lists multiple addresses, the issuing location controls.

Buyers And Sellers Can Use Records

Records can satisfy documentation rules for goods sales and leases, including confirmations, final terms, firm offers, changes, and waivers. For goods sales of $500 or more, a sufficient record must indicate that a contract was made. Signature, delivery, and deadline requirements still apply; merchant firm offers remain irrevocable for no more than three months. In deals combining goods with services or other property, sales rules cover the whole deal when goods sales predominate. Otherwise, mainly goods-related provisions apply, and other law can govern the remaining parts.

Contract Parties Can Set Dispute Terms

A party harmed by an alleged commercial-code breach can waive all or part of the claim in a signed record. No payment or other exchange is required. A promise or order to pay money can name its governing law or required dispute forum without losing negotiable status. It must still meet the other legal requirements for negotiability.

Debtors get proof before redirecting payments

For controllable accounts and payment rights, a signed transfer notice must identify the debt, transfer, new controller, and a commercially reasonable payment method. Before notice, the debtor and current controller must agree in a signed record on a reasonable way to provide transfer proof. The debtor can request proof and keep paying the former controller if proof is not furnished. After effective notice, payment must follow its directions rather than go to the former controller, subject to statutory exceptions. Other laws' different rules for personal, family, or household debts still apply.

Digital asset buyers gain claim protections

Buyers of controllable electronic records generally receive the rights their sellers held or could transfer, limited to the interest purchased. Buyers who gain control for value, act in good faith, and lack notice of another property claim take free of that claim. These protections also cover related controllable payment rights and can defeat earlier security claims; a financing statement alone is not notice. Electronic-money recipients take free of security claims when they gain control without colluding with the debtor against the lender. The law excludes an electronic exchange record from its money definition when its transfer system operated before government authorization or adoption.

Digital lenders get governing law deadlines

For electronic chattel paper, terms in authoritative copies, related records, or system rules identify the governing jurisdiction; otherwise, the debtor's location applies. For controllable digital records and related payment rights, record designations and system rules set jurisdiction, with a District of Columbia fallback subject to the Article 12 exception. Filing follows the debtor's jurisdiction, as does specified automatic protection for sold controllable payment rights; possession of paper copies follows their location. An effective agreement can select another jurisdiction's law for account-debtor payment matters. After a covered jurisdiction change, existing perfection generally lasts until the earlier of its old-law end date or four months; continued protection requires meeting the new law by then.

Document buyers face updated claim rules

Buyers can take covered payment records, electronic title documents, and controllable digital assets free of an unperfected security claim. They must give value, lack knowledge of the claim, act before perfection, and meet the asset's delivery or control requirements. Separate priority protections for chattel-paper buyers require new value and applicable good-faith, ordinary-course, notice, possession, and control standards. Electronic money is excluded from the general unperfected-claim buyer rule. Control under one specified electronic-title provision does not give a person legal holder status.

Earlier agreements retain transition protections

Valid agreements made before the law's effective date generally retain their existing rights and duties, subject to its transition exceptions. They can generally be completed or enforced under prior law. However, the revised secured-lending and digital-record rules also reach earlier transactions, liens, and property interests, subject to those exceptions. Previously valid interests outside the commercial code remain valid and can use the new law or otherwise applicable prior law. Cases started before the effective date are unaffected.

Earlier digital claims face priority changes

Prior law generally continues to rank competing collateral claims whose priority was established before the law's effective date. On the adjustment date, one year after the effective date, new rules can replace earlier rankings for Article 12 property and electronic money. When secured-transaction priority rules do not apply, Article 12 sets priority for its covered property. Earlier rankings under other law last until the adjustment date, then change to the extent Article 12 replaces them.

Existing lenders face transition compliance deadlines

The adjustment date is one year after the law's effective date. Previously enforceable, perfected security interests stay perfected if they meet the new requirements; otherwise protection ends at the earlier old-law deadline or adjustment date. Previously enforceable but unperfected interests remain enforceable through the adjustment date; continued enforceability requires meeting the new attachment requirements by then. Those interests become perfected when they meet the new perfection requirements, including automatically on the effective date if already compliant. Earlier nonfiling steps count only with attachment before the adjustment date and require new-law perfection before that date; earlier financing statements count only to the extent they meet the new requirements.

Fewer duties for electronic title holders

A person acknowledging control of an electronic document of title for someone else generally owes that person no duty. This also covers a promise to obtain control later. The person need not confirm the acknowledgment to anyone else. An agreement or a law outside Oregon’s document-of-title and secured-transactions chapters can provide otherwise.

Goods buyers gain later loan protections

Goods buyers and lessees are protected from secured advances made after the lender learns of the deal or after 45 days, whichever comes first. The clock starts at purchase or when the lease becomes enforceable; qualifying earlier commitments made without knowledge are excepted. Lenders financing inventory or farm livestock purchases must send signed priority notices; existing content and filing requirements remain. Inventory notices must arrive within five years before possession, and livestock notices within six months before possession. A property owner or lienholder can support a lender's priority in attached goods by signing consent or disclaiming an interest.

Investors Get Updated Securities Control Rules

A purchaser can establish control of rights held through a securities intermediary through someone other than the transferor. That person must hold control and acknowledge holding it for the purchaser, or obtain control after promising to do so. No acknowledgment is required, and it creates no duty or confirmation requirement unless an agreement or other law says otherwise. Controllable electronic records and related controllable payment rights generally fall outside the securities definition of financial assets, subject to its statutory exception. For covered securities matters, the issuer’s or intermediary’s jurisdiction supplies the law even without a connection to the transaction.

Lenders Gain Deposit Account Control Options

Lenders can establish deposit-account control through someone other than the debtor who holds or obtains control and acknowledges doing so for them. A signed agreement among the debtor, lender, and bank can also authorize lender instructions without further debtor consent. The bank’s jurisdiction governs protection and priority of account security interests, even without a transaction connection. That jurisdiction follows a statutory order starting with the account agreement, then considering account statements or the bank’s main office. A security interest, bank knowledge, or lender instructions do not otherwise change the bank’s rights and duties unless it agrees in a signed record.

Lenders gain digital collateral filing alternatives

Lenders can protect claims to controllable digital records and related payment rights through filing or control; control removes the filing requirement. A lender with control outranks a competing lender without control. Control requires nearly all benefits, identifiable control powers, and exclusive powers to block others and transfer control, with shared-power and representative exceptions. Electronic money requires control, while physical money requires possession. For chattel paper—records of secured payments or goods leases—another filing alternative requires keeping every authoritative paper copy and controlling every authoritative electronic copy; paper delivery means voluntary transfer of possession.

Lenders Update Collateral Sale Paperwork

For transactions other than consumer-goods transactions, properly completed state forms provide sufficient information about collateral sales, leases, or licenses. A lower-priority lienholder or consignor seeking proceeds must deliver a signed demand before distribution ends. A lower-priority lienholder must also provide reasonable proof of its claim when asked. A recipient of collateral can obtain a record transfer using a lender-signed transfer statement without separate authentication. The statement must identify the default, remedies used, rights acquired, and parties’ names and mailing addresses.

Mixed lease deals get clearer coverage

The law covers single deals combining a goods lease with services, other goods, or other property rights. When the goods lease is the main part, commercial lease rules apply across the deal. Otherwise, only rules mainly tied to the goods lease apply, subject to special finance-lease provisions. Other law can still govern parts unrelated to leasing goods.

More Ways To Control Electronic Collateral

The law expands ways to establish control of electronic title documents and records of goods-backed debts or leases. Systems must reliably identify the controlling person or provide the required powers to prevent changes and transfer control. Another person can hold control for a claimant, subject to limits on transferors and shared powers. Covered control holders need not acknowledge holding control for others; an acknowledgment creates no duty unless an agreement or outside law says otherwise. Lenders controlling collateral through the newly covered methods also have the existing statutory rights and duties for controlled collateral.

New Categories For Goods Financing Rights

Secured-lending rules classify controllable accounts and health-care insurance payment claims as accounts, but exclude chattel paper and instrument-based payment rights. Chattel paper includes recorded payment rights backed by specific goods and recorded leases mainly providing possession and use of goods. Vessel-use contracts and credit or charge card payment rights are excluded from that category. People owing payment on negotiable instruments are not account debtors, even when those instruments evidence chattel paper.

New Notice Rules For Bank Transfers

Banks can prove nonbank senders received mismatch warnings through records signed before an order’s acceptance. Warnings about conflicting recipient names and account numbers can affect who must pay; conflicting bank identifiers trigger bank-sender rules. Banks can reject orders orally or in a record, with timing based on a reasonable or agreed notice method. Senders can cancel or change orders orally or in a record before acceptance, allowing the bank reasonable time to act. Changes also need verification under any agreed security procedure or bank acceptance; consequential damages require the bank’s express agreement evidenced by a record.

Signed Records Support Letters Of Credit

Letters of credit and related confirmations, notices, transfers, changes, and cancellations can use any form that is a signed record. Parties can choose which law governs the responsibilities of issuers and other credit participants. An agreement making that choice must be in a record signed by the affected parties. Alternatively, the choice can appear in the relevant letter of credit, confirmation, or other undertaking.

Sponsors & Cosponsors

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 90 • No: 7

House vote • 4/28/2025

Third reading. Carried by Mannix. Passed.

Yes: 51 • No: 4

House vote • 4/22/2025

Judiciary: Heard and Reported Out

Yes: 8 • No: 0

Senate vote • 2/18/2025

Third reading. Carried by Prozanski. Passed.

Yes: 26 • No: 2

Senate vote • 2/5/2025