2017 ORS 79.0409¹
UCC 9-409. Restrictions on assignment of letter-of-credit rights ineffective

(1) A term in a letter of credit or a rule of law, statute, regulation, custom or practice applicable to the letter of credit which prohibits, restricts or requires the consent of an applicant, issuer or nominated person to a beneficiary’s assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom or practice:

(a) Would impair the creation, attachment or perfection of a security interest in the letter-of-credit right; or

(b) Provides that the assignment 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 letter-of-credit right.

(2) To the extent that a term in a letter of credit is ineffective under subsection (1) of this section but would be effective under law other than this chapter or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment or perfection of a security interest in the letter-of-credit right:

(a) Is not enforceable against the applicant, issuer, nominated person or transferee beneficiary;

(b) Imposes no duties or obligations on the applicant, issuer, nominated person or transferee beneficiary; and

(c) Does not require the applicant, issuer, nominated person or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party. [2001 c.445 §71]

Chapter 79

Notes of Decisions

Where creditor with prior perfected secured interest opts not to exercise elective remedies against debtor, creditor maintains security interest and sub­se­quent garnishor takes subject to creditor so that may trace and recapture collateral funds from garnishor. Davis v. F.W. Financial Services, Inc., 260 Or App 191, 317 P3d 916 (2013), Sup Ct review denied

1 Legislative Counsel Committee, CHAPTER 79—Secured Transactions, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors079.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 79, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano079.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.