Opinion ID: 3134113
Heading Depth: 4
Heading Rank: 1

Heading: TheUCC

Text: The relevant UCC principles discussed above, see supra pp. 12-19, guide our analysis. M&T Bank is the holder of Brown's note because M&T Bank possesses the note and because the note, having been indorsed in blank, is payable to bearer. RCW 62A.1-201(21)(A) (holder); RCW 62A.3-205(b) (indorsed in blank). As the holder of the note, M&T Bank is entitled to enforce the note; it is the PETE. RCW 62A.3-30l(i). As the PETE, M&T Bank has the authority to modify and discharge the obligation. RCW 62A.3-604. If Brown had fulfilled her obligation and paid M&T Bank, the obligation would have been discharged and she would have been protected from any other suit on the note. RCW 62A.3-602(a). We agree with the Department that the UCC's focus on PETE status aligns with the legislature's intent behind the DTA's mediation program. See Bain, 175 Wn.2d at 103-04 (interpreting the DTA in light of article 3 principles). By enacting a program designed to promote the modification of notes, the legislature necessarily intended the party with the authority to negotiate and modify the note to be present in the FFA mediation session. See RCW 61.24.163(7)(b)(ii) (requiring the mediator to send a notice stating that a person with authority to agree to a resolution, including a proposed settlement, loan modification, or dismissal or continuation of the foreclosure proceeding, must be present ... during the mediation session). As discussed above, the party with such modification authority is the PETE, regardless of whether the PETE owns the note. See supra pp. 12-19. We implement the -27- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 legislature's intent by holding that the party with the authority to modify the loan under article 3 of the UCC-here, the note holder, M&T Bank-is the beneficiary for purposes of the mediation exemption provision, RCW 61.24.166. The Department was entitled to rely on the undisputed declaration stating M&T Bank was the actual holder of the note, thereby satisfying RCW 61.24.030(7)(a) andRCW 61.24.163(5)(c).