HD48 - Modifications to the Uniform Commercial Code
Executive Summary: During the 1988 and 1989 Interim, the Joint Subcommittee received testimony on proposed revisions to five areas of the Uniform Commercial Code, which were offered by the National Conference of Commissioners on Uniform State Laws. Revisions have been proposed in three existing Articles of the U.C.C.: Commercial Paper (Article 3 or Title 8.3 of the Code of Virginia), Banking Deposits and Collections (Article 4 or Title 8.4 of the Code of Virginia) and Bulk Sales (Article 6 or Title 8.6 of the Code of Virginia). The Conference has also proposed that two new Articles be added to the ten existing Articles of the U.C.C. to cover commercial law in the areas of Leases (Article 2A or Title 8.2A of the Code of Virginia) and Funds Transfers (Article 4A or Title 8.4A of the Code of Virginia). During the course of this study in 1988 and 1989, the Joint Subcommittee heard from: Mr. Carlyle C. Ring, Jr., one of Virginia's Commissioners to the National Conference of Commissioners on Uniform State Laws, and John W. Edmonds, III, Esquire, representing the Virginia Bankers Association. The Joint Subcommittee also received correspondence from the business law sections of the Virginia State Bar and the Virginia Bar Association. In 1988, the Joint Subcommittee found that the issues addressed by the proposed revisions to the U.C.C. were very complex, and that several interest groups were developing their positions regarding these proposed revisions. The Joint Subcommittee found that the various suggested revisions to the U.C.C. had merit and appeared to be conceptually sound, but there was a need to more thoroughly address some of the changes in detail since they require imposing additions and changes to the Uniform Commercial Code. The Joint Subcommittee also found that the National Conference of Commissioners on Uniform State Laws was still refining many of these proposed revisions. The Joint Subcommittee recommended to the 1989 General Assembly that the study be continued in order to afford the various interest groups time to perform a detailed and thorough analysis of these changes and to report their positions on these proposed revisions to the Subcommittee, and to afford more time to the Conference to refine these proposed revisions. Again, in 1989, the Joint Subcommittee received testimony on the suggested revisions to the U.C.C. concerning Leases, Wire Transfers, and Bulk Sales. Again, the Joint Subcommittee found that it was unable to complete its work in the areas of the study concerning Leases and Bulk Sales due to new developments nationwide and to the fact that many issues concerning these proposed revisions remain unresolved. However, the Joint Subcommittee found that the final version of Article 4A (Wire Transfers) represents a compromise which attempts to strike a balance between the interest of the public, those of the providers of funds transfer services and those of the users. It found that Article 4A, when enacted into law by the various states, will provide a comprehensive legal structure for a class of payments known as wholesale funds transfers, and a comprehensive body of law that defines the rights and obligations that arise from "funds transfers." It found that presently, while the greatest dollar value is moved by funds transfers, existing law, regulation and private agreement covering funds transfers are considered inadequate and generally incapable of efficiently resolving the rights and obligations of the parties connected with "funds transfers." Because the interested parties were in agreement with the draft of Article 4A, the Joint Subcommittee recommended that a bill be drafted to introduce legislation in the 1990 Session of the General Assembly to enact Article 4A. It also recommended that a resolution be drafted to continue the study for another year. |
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