§7021 Transferable Records

Summary

Treats certain electronic loan documents as transferable records and explains who controls them and what rights come with control. Transferable record — an electronic record that would be a "note" under UCC Article 3 if it were written, that the issuer agreed can be transferred, and that relates to a loan secured by real property. "Electronic record," "electronic signature," and "person" are defined in section 7006. A person has control when the system tracking the record reliably shows them as the person issued or most recently transferred the record. A valid system keeps one official copy that is unique and protected from unauthorized changes, shows who holds it, stores it with the controller or their custodian, marks copies as non‑authoritative, and needs the controller’s consent to change the named assignee. A controller is treated as the holder under the UCC and has the same rights and defenses (including rights under sections 3–302(a), 9–308, or revised 9–330 if those rules apply). An obligor has the same defenses as under the UCC. If enforcement is sought, the enforcer must provide reasonable proof of control, such as access to the authoritative copy and related business records. UCC references mean the UCC in effect where the record is governed.