554.9408 Restrictions on assignment of promissory notes, health care insurance receivables, and certain general intangibles ineffective. 1. Term restricting assignment generally ineffective. Except as otherwise provided in subsection 2, a term in a promissory note or in an agreement between an account debtorand a debtor which relates to a health care insurance receivable or a general intangible,including a contract, permit, license, or franchise, and which term prohibits, restricts, orrequires the consent of the person obligated on the promissory note or the account debtor to,the assignment or transfer of, or creation, attachment, or perfection of a security interest in,the promissory note, health care insurance receivable, or general intangible, is ineffective tothe extent that the term: a. would impair the creation, attachment, or perfection of a security interest; orb. provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the promissory note, health care insurancereceivable, or general intangible. 2. give rise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the promissory note, health care insurancereceivable, or general intangible. 2. Applicability of subsection 1 to sales of certain rights to payment. Subsection 1 applies to a security interest in a payment intangible or promissory note only if the security interestarises out of a sale of the payment intangible or promissory note, other than a sale pursuantto a disposition under section 554.9610 or an acceptance of collateral under section 554.9620. 3. Legal restrictions on assignment generally ineffective. A rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmentalbody or official, person obligated on a promissory note, or account debtor to the assignmentor transfer of, or creation of a security interest in, a promissory note, health care insurancereceivable, or general intangible, including a contract, permit, license, or franchise betweenan account debtor and a debtor, is ineffective to the extent that the rule of law, statute, orregulation: a. eivable, or general intangible, including a contract, permit, license, or franchise betweenan account debtor and a debtor, is ineffective to the extent that the rule of law, statute, orregulation: a. would impair the creation, attachment, or perfection of a security interest; orb. provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the promissory note, health care insurancereceivable, or general intangible. 4. Limitation on ineffectiveness under subsections 1 and 3. To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates toa health care insurance receivable or general intangible or a rule of law, statute, or regulationdescribed in subsection 3 would be effective under law other than this Article but is ineffectiveunder subsection 1 or 3, the creation, attachment, or perfection of a security interest in thepromissory note, health care insurance receivable, or general intangible: a. is Article but is ineffectiveunder subsection 1 or 3, the creation, attachment, or perfection of a security interest in thepromissory note, health care insurance receivable, or general intangible: a. is not enforceable against the person obligated on the promissory note or the account debtor; b. does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; c. does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or acceptpayment or performance from the secured party; d. does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health care insurance receivable, or general intangible, including anyrelated information or materials furnished to the debtor in the transaction giving rise to thepromissory note, health care insurance receivable, or general intangible; e. does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or theaccount debtor; and f. does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or theaccount debtor; and f. does not entitle the secured party to enforce the security interest in the promissory note, health care insurance receivable, or general intangible. 5. Section prevails over specified inconsistent law. This section prevails over any inconsistent provision of an existing or future statute, rule, or regulation of this state unless Sat Dec 23 11:02:07 2023 Iowa Code 2024, Section 554.9408 (32, 0) §554.9408, UNIFORM COMMERCIAL CODE 2 the provision is contained in a statute of this state, refers expressly to this section, and statesthat the provision prevails over this section. 2000 Acts, ch 1149, §70, 185, 187; 2012 Acts, ch 1052, §11, 37Referred to in §554.9401, 627.13 Sat Dec 23 11:02:07 2023 Iowa Code 2024, Section 554.9408 (32, 0)
Iowa Legal Code