2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 9 - Secured Transactions › Part 3 - PERFECTION AND PRIORITY › Subpart 3 - PRIORITY › Section 55-9-326A - Priority of security interest in controllable account, controllable electronic record and controllable payment intangible. (Effective January 1, 2024.)

A security interest in a controllable account, controllable electronic record or controllable payment intangible held by a secured party having control of the account, electronic record or payment intangible has priority over a conflicting security interest held by a secured party that does not have control.
History:
1978 Comp., § 55-9-326A, enacted by Laws 2023, ch. 142, § 70.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
1.
Control priority.
This section adopts an approach to priority in controllable accounts, controllable electronic records, and controllable payment intangibles that is similar to the approach of Sections 9-327 (deposit accounts) and 9-328 (investment property): A security interest perfected by control has priority over conflicting security interests that are not perfected by control.
2.
Multiple persons having control.
This section does not apply if more than one secured party has control of a controllable account, controllable electronic record, or controllable payment intangible, which may occur through shared control or a person in control acknowledging that it has control on behalf of another person. See Section 12-105(b)(2) (shared control), (e) (control through another person). In those situations, the residual first-to-file-or-perfect rule of Section 9-322(a)(1) would apply. However, affected persons may believe that the application of that first-in-time rule is not appropriate in some circumstances.
Example:
A person (A) has a security interest in a controllable electronic record perfected by control (other than through an acknowledgment by another person under Section 12-105(e)) and A acknowledges that it has control on behalf of another person (B). B has a security interest perfected by a financing statement filed before A obtained control. Under Section 9-322(a) (the first-to-file-or-perfect rule), by obtaining control through A's acknowledgment B's security interest would have priority over A's previously senior security interest. To avoid that result, A might insist on B's subordination as a condition to A's acknowledgment. See Section 9-339 (subordination by agreement). In cases of multiple persons having control, it will be important for interested persons to adjust priorities by agreement, when appropriate. See also Section 12-105, Comment 5.
A secured party that relies on perfection by control resulting from the acknowledgment of another person under Section 12-105(e) need not prove a formal agency relationship with the acknowledging person. This is a principal rationale underlying the various provisions in Articles 7, 8, 9, and 12 which provide for a person to obtain control through another person's control and acknowledgment. However, a person obtaining control through an acknowledgment necessarily must rely on the integrity of the acknowledging person. In the case of perfection by control in the Example, the acknowledging person presumably also has control for the benefit of the debtor. The secured party's (B 's) control, and perfection, depends on the acknowledging person's (A's) continued control. The secured party's (B's) perfection would be lost if the acknowledging person (A) were to lose or give up control, as by transferring control to the debtor or any other person. See, e.g., Section 9-314, Comment 2.
An acknowledging person also might serially acknowledge over time that it holds for the benefit of multiple purchasers (secured parties or buyers). Putting aside perfection by filing as in the Example, secured parties so perfected would have priority based on priority of timing of control under Section 9-322(a). However, a transfer of control by the acknowledging person to a qualifying purchaser, or an acknowledgment by that the person that it has control on behalf of a buyer or secured party that is a qualifying purchaser, would allow the qualifying purchaser to take free of (or have priority over) earlier security interests or other interests. It follows that a first-to-control priority rule for security interests would not protect a secured party having control through another person's acknowledgment from having its interest cut off or subordinated by a later-in-time qualifying purchaser. Such a "first-to-control" priority rule would be illusory inasmuch as purchasers relying on control through another person's acknowledgment would have no reliable method of determining priority over subsequent transferees other than reliance on the acknowledging person's integrity.
ANNOTATIONS
Effective dates.
— Laws 2023, ch. 142, § 112 made Laws 2023, ch. 142, § 70 effective January 1, 2024.