2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 9 - Secured Transactions › Part 3 - PERFECTION AND PRIORITY › Subpart 1 - LAW GOVERNING PERFECTION ANDPRIORITY › Section 55-9-304 - Law governing perfection and priority of security interests in deposit accounts.

(a) The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a deposit account maintained with that bank.
(b) The following rules determine a bank's jurisdiction for purposes of Sections 55-9-301 through 55-9-342 NMSA 1978:
(1) if an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of the Uniform Commercial Code, that jurisdiction is the bank's jurisdiction;
(2) if Paragraph (1) of this subsection does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction;
(3) if neither Paragraph (1) nor Paragraph (2) of this subsection applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction;
(4) if none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located; and
(5) if none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the chief executive office of the bank is located.
History:
1978 Comp., § 55-9-304, enacted by Laws 2001, ch. 139, § 24; 2005, ch. 144, § 99.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
1.
Source.
New; derived from Section 8-110(e) [55-8-110 NMSA 1978] and former Section 9-103(6) [55-9-103 NMSA 1978].
2.
Deposit Accounts.
Under this section, the law of the "bank's jurisdiction" governs perfection and priority of a security interest in deposit accounts. Subsection (b) contains rules for determining the "bank's jurisdiction." The substance of these rules is substantially similar to that of the rules determining the "security intermediary's jurisdiction" under former Section 8-110(e), except that subsection (b)(1) provides more flexibility than the analogous provision in former Section 8-110(e)(1). Subsection (b)(1) permits the parties to choose the law of one jurisdiction to govern perfection and priority of security interests and a different governing law for other purposes. The parties' choice is effective, even if the jurisdiction whose law is chosen bears no relationship to the parties or the transaction. Section 8-110(e)(1) has been conformed to Subsection (b)(1) of this section, and Section 9-305(b)(1) [55-9-305 NMSA 1978], concerning a commodity intermediary's jurisdiction, makes a similar departure from former Section 9-103(6)(e)(i).
3.
Change in Law Governing Perfection.
When the bank's jurisdiction changes, the jurisdiction whose law governs perfection under Subsection (a) changes, as well. Nevertheless, the change will not result in an immediate loss of perfection.
See
section 9-316(f) and (g) [55-9-316 NMSA 1978].
4.
No Relation to Bank's Jurisdiction Required.
As to the final clause of Subsection (a),
see
Section 8-110, Comment 5A.
ANNOTATIONS
Repeals and reenactments.
— Laws 2001, ch. 139, § 24 repealed former 55-9-304 NMSA 1978, as amended by Laws 1997, ch. 75, § 24, and enacted a new section, effective July 1, 2001.
The 2005 amendment,
effective January 1, 2006, changes "debtor" to "customer" in Subsection (b)(1).
Compiler's note.
— Although Laws 2005, ch. 144, § 112, added a temporary provision which provided that Paragraphs 5 and 46 of Subsection A of Section 55-9-102 and Section 55-9-304 NMSA 1978, as amended by Sections 94 and 99 of this act, shall be construed as declaring the law as it existed prior to the enactment of this act and not as modifying it, Section 55-9-102 NMSA 1978 as amended by Section 99 does not contain a Paragraph 46 or a Paragraph 5 of Subsection A.