Iowa Code

Iowa Code § 554.9205 (2026)

Use or disposition of collateral permissible

✓ current as of July 2026

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1. When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because: a. the debtor has the right or ability to: (1) use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods; (2) collect, compromise, enforce, or otherwise deal with collateral; (3) accept the return of collateral or make repossessions; or (4) use, commingle, or dispose of proceeds; or b. the secured party fails to require the debtor to account for proceeds or replace collateral. 2. Requirements of possession not relaxed. This section does not relax the requirements\n\nTue Dec 09 22:02:42 2025 Iowa Code 2026, Chapter 554 (108, 4) 163 UNIFORM COMMERCIAL CODE, §554.9207\n\nof possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party. 2000 Acts, ch 1149, §15, 185, 187

Notes of Decisions

Cited in 2 cases, 1989–2000 · leading case: Ellefson v. Centech Corp., 606 N.W.2d 324 (Iowa 2000).

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Ellefson v. Centech Corp., 606 N.W.2d 324 (Iowa 2000). · cites it 4× “Iowa Code Ann. § 554.9205 cmt. 1. Therefore, contrary to pre-UCC law, secured creditors under the UCC do not waive their lien on collateral proceeds in the debtor’s bank account simply because the creditor allows the debtor to deposit collateral proceeds in the debtor’s account…”

Linn Coop. Oil Co. v. Norwest Bank Marion, N.A., 444 N.W.2d 497 (Iowa 1989). · cites it 2× “Also militating against the bank’s position is the language of Iowa Code section 554.9205 which provides that “[a] security interest is not invalid .”

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