UCC 9-406: evaluating an MCA assignment notice
An assignment notice can raise questions about where customer payments should go. This overview uses New York’s current statute as an example; it does not determine the law or outcome for your particular agreement.
Read the actual notice and statute
New York UCC 9-406 addresses when payment to an assignor or assignee discharges an account debtor’s obligation. It includes rules about identifying the rights assigned, requests for reasonable proof, and exceptions. It does not establish that every funder letter is valid or that a disputed notice can simply be ignored.
Preserve the notice, underlying agreements, payment records, and correspondence. Have qualified counsel assess the relevant parties, assigned rights, jurisdiction, and any deadline. Do not assume that negotiation suspends the notice or other proceedings.
If an agreement changes payment instructions or withdraws notices, identify the affected accounts and parties in writing and confirm how the change will be communicated. No withdrawal, discount, or completion time is guaranteed.
Source checked September 18, 2026: New York Senate: UCC 9-406. Other jurisdictions and agreements require their own analysis.
Read the settlement overview and its limitationsUCC 9-406 questions, answered
What is a UCC 9-406 notice?
+
Under New York UCC 9-406, a qualifying assignment notice can change whom an account debtor must pay to discharge an obligation. The provision has conditions and exceptions; the actual notice, agreement, and applicable law matter.
Do my customers have to comply with every letter?
+
Do not assume every letter is effective or ineffective. New York’s statute addresses identification of assigned rights, proof of assignment, and exceptions. The account debtor should obtain advice on the actual notice before deciding whom to pay.
Can the notice be withdrawn in a settlement?
+
A proposed agreement can address withdrawal or changed payment instructions, but acceptance is not guaranteed. Confirm which notices and parties are covered and how any change will be communicated.
Is this the same as a UCC financing statement?
+
No. A financing statement is a public filing; an assignment notice addresses payment of an assigned obligation. A filing alone does not resolve every question about the validity, scope, or enforcement of an asserted interest.
Request a consultation from Coastal
Contact Coastal Debt Resolve for a consultation. Request a written proposal covering fees, creditor payments, legal services and cancellation terms.