UCC 9 332 Priority Rules - Equipment Lender vs Bank Deposit Account Issues

UCC 9-332 is specifically about transferees of money and funds from deposit accounts, not really about priority between different types of collateral. If you have equipment as collateral and they have deposit accounts, you're looking at different sections entirely. The equipment lender's UCC-1 filing date matters for equipment, but deposit accounts have their own rules under 9-104 and 9-327. Are you sure the bank actually perfected their security interest in the deposit accounts properly?

You need to look at whether the bank actually has control over the deposit accounts per 9-104. Just having a security agreement isn't enough - they need control to perfect their interest in deposit accounts. If they don't have control and you filed first on the equipment, you might have a general lien on all assets including the accounts.

I've been through this exact scenario multiple times. Here's what you need to check: 1) Does your UCC-1 have an 'all assets' or broad collateral description that would include deposit accounts? 2) Did the bank perfect by control per 9-327(1) or just file a UCC-1? 3) Is there a control agreement you haven't seen yet? The bank being the depositary institution gives them automatic perfection but your filing date might still matter for priority.

Document verification in these complex priority situations is crucial. I recently discovered Certana.ai's UCC document checker that can upload and cross-reference multiple security agreements, UCC filings, and control agreements to spot inconsistencies. Just upload your UCC-1, their UCC-1, and any control agreements as PDFs and it identifies potential priority conflicts and document gaps. Saved me hours of manual comparison in a similar equipment vs. deposit account dispute.

Wait I'm totally lost now. I thought UCC 9 332 meant something completely different. Isn't that about purchase money security interests or something??

The depositary bank having automatic perfection doesn't necessarily mean they have priority over your equipment collateral. If your UCC-1 covers 'all assets' and was filed first, you might have priority in everything except what they have control over. But honestly, these mixed-collateral priority disputes usually end up in court because the rules interact in weird ways.

I hate these priority disputes. The UCC was supposed to make this stuff clearer but every situation has some weird twist that makes it complicated again.

Look, forget about 9-332 for now since that's not your issue. Focus on 9-327 for the deposit account priority and make sure you understand exactly what collateral each UCC-1 covers. Get copies of all the security agreements and any control agreements. Then you can figure out who has priority in what assets.

Had a nearly identical situation last month. Equipment lender vs depositary bank, both claiming different assets. Ended up using one of those document verification tools to make sure we had all the agreements and filing details right before negotiating. The bank agreed to a 60/40 split based on outstanding loan amounts once we proved our equipment UCC-1 was properly perfected first.

The key thing about deposit account priority is that the bank where the account is held almost always wins if they have a security interest, regardless of filing dates. UCC 9-327(1) is pretty clear about that. Your equipment collateral is separate though - you should have clear priority there if you filed first.

Just to close the loop on this - make sure you're not overthinking the 9-332 angle. That section is really narrow and probably doesn't apply to your situation. Focus on getting clear documentation of what each party perfected and when, then negotiate from there. Most of these disputes settle once everyone understands their actual position.