General effectiveness of security agreement

(a) Except as otherwise provided in the Uniform Commercial Code [Chapter 55, NMSA 1978], a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. (b) A transaction subject to Chapter 55, Article 9 NMSA 1978 is subject to any applicable rule of law which establishes a different rule for consumers, and to the provisions of the Oil and Gas Products Lien Act [48-9-1 to 48-9-8 NMSA 1978]; Chapter 56, Article 1 NMSA 1978; the Artists' Consignment Act [56-11-1 to 56-11-3 NMSA 1978]; the Pawnbrokers Act [56-12-1 to 56-12-16 NMSA 1978]; the New Mexico Bank Installment Loan Act of 1959 [58-7-1 NMSA 1978]; the New Mexico Small Loan Act of 1955 [Chapter 58, Article 15 NMSA 1978]; the Motor Vehicle Sales Finance Act [58-19- 1 NMSA 1978]; and to rules adopted under those statutes. (c) In case of conflict between Chapter 55, Article 9 NMSA 1978 and a rule of law, statute or rule described in Subsection (b) of this section, the rule of law, statute or rule controls. Failure to comply with a statute or rule described in Subsection (b) of this section has only the effect the statute or rule specifies. (d) Chapter 55, Article 9 NMSA 1978 does not: (1) validate any rate, charge, agreement or practice that violates a rule of law, statute or rule described in Subsection (b) of this section; or (2) extend the application of the rule of law, statute or rule to a transaction not otherwise subject to it. (e) The filing provisions set forth in the Farm Products Secured Interest Act [56-13-1 to 56-13-14 NMSA 1978] and in the Public Utility Act [62-13-1 NMSA 1978] are in addition to the filing provisions set forth in Chapter 55, Article 9 NMSA 1978. Failure to comply with the filing provisions in those acts has only the effect specified in those acts. History: 1978 Comp., § 55-9-201, enacted by Laws 2001, ch. 139, § 11. OFFICIAL COMMENTS UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. 1. Source. Former Sections 9-201 and 9-203(4). 2. Effectiveness of Security Agreement. Subsection (a) provides that a security agreement is generally effective. With certain exceptions, a security agreement is effective between the debtor and secured party and is likewise effective against third parties. Note that "security agreement" is used here (and elsewhere in this article) as it is defined in Section 9-102: "(A)n agreement that creates or provides for a security interest." It follows that subsection (a) does not provide that every term or provision contained in a record that contains a security agreement or that is so labeled is effective. Properly read, former Section 9-201 was to the same effect. Exceptions to the general rule of Subsection (a) arise where there is an overriding provision in this article or any other article of the UCC. For example, Section 9-317 subordinates unperfected security interests to lien creditors and certain buyers, and several provisions in part 3 subordinate some security interests to other security interests and interests of purchasers. 3. Law, Statutes, and Regulations Applicable to Certain Transactions. Subsection (b) makes clear that certain transactions, although subject to this article, also are subject to other applicable laws relating to consumers or specified in that subsection. Subsection (c) provides that the other law is controlling in the event of a conflict, and that a violation of other law does not ipso facto constitute a violation of this article. Subsection (d) provides that this article does not validate violations under or extend the application of the other applicable laws.