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
30 provisions identified: 4 benefits, 0 costs, 26 mixed.
Buyers and money recipients gain lien protections
Buyers taking delivery of covered goods, papers, or security certificates before a creditor perfects its claim can avoid that claim. They must give value and receive delivery without knowing about the security claim or agricultural lien. Buyers and lessees also gain protection against advances made after creditor knowledge or 45 days, whichever comes first. Qualifying commitments made without that knowledge before the 45-day deadline remain exceptions. Money recipients take free of security claims without collusion to violate creditor rights; electronic-money recipients must also obtain control.
Consumer protections still apply to electronic assets
Beginning May 6, 2026, transactions covered by Utah's controllable electronic records law still follow applicable consumer protection rules. The Utah Consumer Credit Code also applies. When the electronic-records law conflicts with Utah's rules for loans backed by collateral, the collateral rules control.
Creditors must sign collateral sale notices
Creditors selling covered collateral must send reasonable signed notices. A claimant seeking notice through the specified claim-of-interest rule must also submit a signed notice. Sale notices are not required for perishable collateral, collateral quickly losing value, or collateral customarily sold on a recognized market. The revised form for nonconsumer transactions explains public or private sale details and how to request an accounting. It lists an accounting charge only when a charge will apply.
Debtors get records and collateral releases
Beginning May 6, 2026, covered creditors must answer signed requests for debt accountings or collateral lists within 14 days. Debtors get one free response every six months; extra responses cost up to $25. After secured obligations end and further lending commitments stop, signed demands trigger required collateral-control releases within 10 days. Notified parties owing assigned payments also receive releases within 10 days, except for sales of specified payment rights. Demands to end financing statements must be signed; the existing 20-day deadline and legal triggers remain unchanged.
Assigned debts keep defenses with digital exceptions
People owing assigned payments retain specified claims and defenses arising before receipt of a signed assignment notice. Controllable accounts and payment rights are excluded from several usual payment and notice protections. Those exclusions cover paying the original creditor before notice, demanding assignment proof, and rejecting notices covering less than a full installment. The related limit on waiving that partial-installment option also does not apply. Negotiable instruments showing chattel paper count as promissory notes for specified assignment and security-claim rules.
Borrowers get signed debt explanation rules
Beginning May 6, 2026, a lender's accounting must be signed and explain unpaid secured debt in reasonable detail. Its balance date must fall within 35 days before or after the record's date. After consumer goods are sold, borrowers must sign requests explaining money left over or still owed when they have surplus rights or deficiency liability. The lender can provide the explanation and demand payment of the remaining debt in a record, not only a writing.
Creditors gain claims but must credit payments
Limits on claims to later-acquired consumer goods or commercial tort claims do not block claims to specified proceeds. Covered proceeds include consumer goods received as proceeds and goods mixed together. Creditors holding or controlling covered collateral, including electronic assets, have statutory rights and duties. They can hold some proceeds as added security, but money received must reduce the debt unless returned to the debtor.
Goods buyers face signed contract rules
Goods contracts priced at $500 or more generally need a record signed by the person being held to it. Enforcement is limited to the quantity shown, and legal exceptions remain. Between merchants, a confirmation can count unless the informed recipient objects in a record within 10 days. Earlier agreements cannot contradict a final record; business practices and consistent added terms can explain it, subject to limits. Adding a seal does not give a goods contract or offer the special legal status of a sealed document.
Bank security steps shape customer liability
Beginning May 6, 2026, banks and customers can agree on payment-order security steps that place duties on either party. Codes, biometrics, and other identifiers can be used; a signature comparison or known email, internet address, or phone number alone is insufficient. An unauthorized order can bind the customer if the agreed process is commercially reasonable and the bank accepts it in good faith. The bank must follow that process and applicable customer limits recorded in a record. Customers retain a legal defense based on who caused the order or what information or facilities were accessed.
Digital debt transfers change payment duties
Beginning May 6, 2026, debtors can pay the former controller until an effective transfer notice requires payment to the new controller. The signed notice must identify the debt and new controller, state the transfer, and provide a commercially reasonable payment method. Before notice, the debtor and current controller must agree in a signed record on a reasonable proof-of-transfer method. If requested proof is not supplied promptly through that method, the debtor can pay the former controller. Debtors can reject notices demanding split or partial payments or multiple payment methods; effective payment restrictions and different household-debt rules under other law remain protected. A lender owes a status-based duty when, at the later of obtaining control or attachment of its security interest, it knows the covered collateral, associated record, and system lack debtor or obligor identification or contact information.
Property owners' consent affects fixture claims
The law where tangible collateral sits governs specified filing and creditor-priority questions. Covered questions include filings for fixtures, security claims in timber to be cut, and certain claims without creditor possession. Fixtures are goods attached to real property. A fixture creditor gains priority over a conflicting property interest when the owner or property lender gives signed consent or disclaims ownership. That priority applies even without the usual steps to protect the fixture creditor against competing claims.
Business deals define creditor rights and filings
Protected business series count as legal persons when their founding law limits creditor access to their assets. Covered consignments and purchases of payment rights count as security interests. A seller keeping title also holds a security interest; a buyer's special interest in identified goods does not. Separate statutory rules decide whether a lease creates a security interest. Signed filing permission or becoming bound by a security agreement authorizes covered filings for the listed collateral and applicable proceeds.
Inventory and livestock lenders need timely notices
Lenders financing purchases of inventory or livestock need signed notices to claim specified priority over conflicting creditors. Notices must describe the assets and state that the lender has or expects a purchase-financing security claim. The conflicting creditor must receive notice within five years before inventory possession or six months before livestock possession. The purchase-financing claim must also be perfected when the debtor receives possession.
Account creditors follow jurisdiction and transition rules
For covered electronic records, statutory jurisdiction rules govern; a different agreed choice works only as the governing law permits. Deposit-account security claims follow the bank's jurisdiction, even without another connection there. Specified investment assets follow designated jurisdiction rules, while filings and specified automatic protections follow the debtor's location. For covered payment records and controllable assets, creditor protection continues after a jurisdiction change for up to four months. It ends sooner if the original law's protection expires; creditors must follow the new jurisdiction's requirements to keep protection afterward.
Bank credit guarantees get dispute rules
Beginning May 6, 2026, parties to letters of credit can choose binding law and dispute forums. The choice must appear in a record signed by affected parties or in the relevant letter of credit or undertaking. Bank branches count as separate legal entities for jurisdiction, governing law, and recognition of letters of credit between branches. A branch's location follows its listed address, or its issuing address when several are listed. The separate-branch rule does not apply to enforcing a judgment.
Banks keep duties unless they agree
A security claim against a deposit account does not itself change the bank's rights or duties. Neither bank knowledge of the claim nor instructions from the secured creditor change those duties. The bank can agree to different rights or duties in a signed record.
Buyers get electronic goods document rules
Beginning May 6, 2026, chattel paper covers recorded payment rights secured by specific goods and qualifying leases mainly for possession and use. It excludes vessel-use and credit-card payment rights; writings recording chattel paper are not instruments under secured-transaction rules. People owing on negotiable instruments are not account debtors under those rules, even when the instrument records chattel paper. Reliable systems establish control of electronic chattel paper by identifying its authoritative copy and assignee and tracking changes and transfers. Electronic title-document systems must identify authoritative copies and holders, protect holder identification, and allow control transfers; another person can acknowledge holding control, without duties unless agreed or required by other law.
Collateral settlements and lien payments need signatures
Lower-ranking lien holders must send signed demands before proceeds are fully distributed to receive payment through the statutory proceeds process. Required records for collateral transfer statements, settlement consents, objections, and specified notices must also be signed. Signed records are required for covered agreements waiving rights or extending the collateral-disposal period. The law generally requires disposal within 90 days after possession unless the parties agree otherwise.
Digital asset buyers gain qualified protections
Qualifying buyers of controllable electronic records and linked payment rights gain priority over earlier security claims, including perfected claims. Chapter 12 governs what counts as giving value, and existing securities and electronic-record protections remain. Creditors lose specified liability limits when they know debtor identification or contact information is missing from covered records or systems. That knowledge is tested at the later of gaining control or the security claim becoming enforceable against the collateral. The law excludes central bank digital currency and electronic exchange records from systems operating before government adoption from its definition of money.
Digital asset holders must show control
Beginning May 6, 2026, control of covered electronic records and electronic money requires access to substantially all their benefit. The holder must be readily identifiable and have exclusive powers to block others from that benefit and transfer control. The law also addresses shared powers and control through another person. A lender controls covered digital payment rights by controlling the electronic record that proves them. Someone acknowledging control of an electronic record for another person has no duty to that person, or to confirm it elsewhere, unless an agreement or another law requires one.
Digital buyers gain protection against claims
Beginning May 6, 2026, buyers generally receive the rights their seller has or can transfer, limited by the interest purchased. A qualifying buyer takes covered electronic records and payment rights free of property claims by obtaining control for value, in good faith, without notice. A financing statement alone does not give notice of a property claim. A separate rule protects buyers against unperfected lender claims when they give value without knowledge and obtain required control or authoritative paper copies. Among competing lenders, control of covered electronic records or payment rights beats a claim held without control.
Electronic checks keep their payment force
Beginning May 6, 2026, sending a check image and related information counts as issuing the check when the payee agrees. The information must let a bank collect it as an electronic check under federal law. Destroying the paper check during image processing does not, by itself, cancel the duty to pay. Payment instruments can also name the law or forum for disputes without losing negotiable status, provided they meet the other requirements.
Electronic signatures count in commercial agreements
People can sign commercial records using electronic symbols, sounds, or processes when they intend to approve the record. Records and notices can travel through usual communication methods to an address reasonable for the situation. Courts decide whether a contract term is noticeable enough that a reasonable person should have seen it. A person claiming a breach can give up all or part of that claim in a signed record without receiving anything in return.
Investors get revised asset control rules
Beginning May 6, 2026, covered controllable electronic records and payment rights generally fall outside the investment-securities definition of a financial asset. The law preserves its stated exception to that exclusion. A buyer can control rights held through a securities intermediary through someone other than the seller who acknowledges holding or obtaining control. That acknowledgment alone creates no duty unless an agreement or another law does. For specified securities matters, the issuer's or intermediary's local law applies even without another connection to that place.
Lenders follow asset specific local laws
Beginning May 6, 2026, electronic chattel paper's designated jurisdiction governs protection of lender claims against others and claim priority. That rule applies even without another connection to the place; possession-based claims involving authoritative paper copies follow the copy's location. Covered electronic records and the digital payment rights they prove follow the electronic record's jurisdiction. Filing follows the debtor's location for both types of collateral. The debtor's location also governs automatic protection of a security interest created by selling a controllable payment intangible.
Lenders gain deposit account control routes
Beginning May 6, 2026, a lender can control a deposit account by being its bank or becoming the bank's customer. Another route is a signed agreement among the debtor, lender, and bank to follow lender instructions without further debtor consent. A person other than the debtor can also hold control for the lender and acknowledge that role. The debtor can still direct funds without defeating the lender's control. For deposit accounts, electronic chattel paper, and electronic money, control holders need not acknowledge another person's role; acknowledgment creates no duty or confirmation requirement unless agreed or required by other law.
Lenders get rules for digital collateral
Beginning May 6, 2026, secured-loan rules recognize digital payment rights whose records direct payment to the person in control. They also classify electronic records, payment rights, software, and tangible money, and define parties selling or transferring payment rights and security interests. For these rules, money excludes deposit accounts and electronic money that cannot be legally controlled. Enforcing a security interest requires value given and debtor rights in the property, or power to transfer those rights. A signed agreement describing the property can satisfy the agreement requirement; alternatives include control of listed electronic assets or possession and control of chattel paper.
Merchants face binding signed contract promises
Beginning May 6, 2026, a merchant's signed promise keeps an offer open for the stated or reasonable period, up to three months. The merchant must separately sign that promise when it appears on the recipient's form. Goods contracts can also require signed records for changes or cancellation. When a merchant supplies that requirement, the other party must separately sign it unless both parties are merchants.
New rules for mixed sales and leases
Beginning May 6, 2026, Utah sets rules for deals combining goods sales or leases with services or other property. When the goods sale or lease is the main part, the relevant commercial-code chapter covers the whole deal. Otherwise, only rules mainly about the goods portion apply, with extra rules for finance leases. Other law can still govern parts unrelated to goods. Deals that only create a security interest remain outside the sales chapter.
Payment record buyers need possession and control
Delivery of covered commercial papers means a voluntary transfer of possession. Buyers of chattel paper—records showing payment obligations tied to goods—must give new value in good faith during ordinary business. To claim specified priority, they must possess every authoritative paper copy and control every authoritative electronic copy. A copy showing assignment to another identified creditor counts as knowledge that the purchase violates that creditor's rights.
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/ uncircled
Yes: 0 • No: 0
Senate vote • 3/5/2026
Senate/ circled
Yes: 0 • No: 0
Senate 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