About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

PERMANENT EDITORIAL BOARD ARTICLE 9 STUDY GROUP 1 (DOCUMENT NO. 45, May 15, 1992)

handle is hein.ali/alicc0256 and id is 1 raw text is: 27 oo( FEDERAL RESERVE BANK OF NEW YORK NEW YORK, N.Y. 10045 DIRECT NUMBER 212-720-5022 FACSIMILE. 212-785-5748 ERNEST T. PATRIKIS GCENRAL Couk$Ct. Atio Cxcu3mi'n Vct PRCI5IOCDNT May 15, 1992 William F. Kroener, III, Esq. Davis, Polk & Wardwell One Chase Manhattan Plaza New York, NY 10005 Re: Proposed Amendments to Article 9 of the Uniform Commercial Code Regarding the Use of Deposit Accounts as original Collateral -- April 30. 1992 Draft (Proposal) Dear Bill: The following contains our general comments on the Proposal. Due to time constraints, we have not yet had the opportunity to review the Proposal carefully. We hope to do so over the next several weeks and provide you with more detailed comments. In general, we are very disappointed with the Proposal. Although the Proposal notes the concerns we communicated to you in our letter to you dated February 27, 1992, and again at the meeting we had on March 30, 1992, it does not address them adequately. Specifically, it fails to take fully into account the special and important role banks play in the payments system and in providing transactions account services to customers. We continue to believe that the Proposal, while workable in the case of account debtors in commercial transactions, is inappropriate for financial institutions, L~., banks, broker-dealers and other participants in the payments system. A sound and efficient payments system is fundamental to a sound and efficient economy. The Proposal has the potential to cause gridlock in the financial markets. This is because, among other things, the Proposal would give a third-party creditor the ability to freeze its debtor's deposit accounts simply by making a written demand for payments to the bank that maintains the deposit account. We believe that the Proposal raises many important issues that need to be further examined and resolved. We urge the Deposit Accounts Study Committee to take a closer look at the potential adverse impact of the Proposal on the banking system, to consider the importance of transactions accounts to bank customers and the Proposal's consumer-protection implications,

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most