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Can you summarize IACO 554.9408?
UNIFORM COMMERCIAL CODE > Restrictions on assignment of promissory notes, health care insurance receivables, and certain general intangibles ineffective.
Short Summary
This legal document, governed by the Iowa Code, specifically the Uniform Commercial Code, addresses the restrictions on the assignment of promissory notes, health care insurance receivables, and certain general intangibles. It states that any term in a promissory note or agreement between an account debtor and a debtor that prohibits, restricts, or requires consent for the assignment or transfer of, or creation, attachment, or perfection of a security interest in the mentioned assets is ineffective to the extent that it impairs the creation, attachment, or perfection of a security interest or provides grounds for default, breach, recoupment, claim, defense, termination, or remedy. However, this restriction does not apply to sales of certain rights to payment under specific circumstances. Additionally, any rule of law, statute, or regulation that prohibits, restricts, or requires consent for the assignment or transfer of, or creation of a security interest in the mentioned assets is also ineffective to the extent that it impairs the creation, attachment, or perfection of a security interest or provides grounds for default, breach, recoupment, claim, defense, termination, or remedy. The document further clarifies that if a term or rule of law would be effective under other laws but is ineffective under this document, it does not enforce the security interest, impose any duty or obligation, require recognition or payment to the secured party, entitle the secured party to use or assign the debtor’s rights, possess trade secrets or confidential information, or enforce the security interest. This document prevails over any inconsistent provision of existing or future statutes, rules, or regulations of Iowa unless expressly stated otherwise.
Whom does it apply to?
Promissory note holders, account debtors, debtors, government bodies or officials
What does it govern?
Restrictions on assignment of promissory notes, health care insurance receivables, and certain general intangibles
What are exemptions?
Sales of certain rights to payment pursuant to a disposition under section 554.9610 or an acceptance of collateral under section 554.9620
What are the Penalties?
No penalties mentioned.
Jurisdiction
Iowa