Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.9306 (2026)

Law governing perfection and priority of security interests in letter-of-credit rights.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.9306 Law governing perfection and priority of security interests in letter-of-credit rights.

Sec. 9306.

    (1) Subject to subsection (3), the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer's jurisdiction or nominated person's jurisdiction is a state.

    (2) For purposes of this part, an issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in section 5116.

    (3) This section does not apply to a security interest that is perfected only under section 9308(4).

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1978, Act 369, Eff. Jan. 1, 1979 ;-- Am. 1998, Act 278, Imd. Eff. July 27, 1998 ;-- Am. 2000, Act 348, Eff. July 1, 2001

Notes of Decisions
Cited in 22 cases, 1982–2002 · leading case: Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999).
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Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999). · cites it 6× “[MCL 440.9306; MSA 19.9306. (emphasis added)] This case presents the following question of first impression under Michigan law: Are the proceeds of a specific item of collateral “identifiable” when the proceeds are part of a lump-sum cash payment that includes cash paid for…”
Matter of Cliff's Ridge Skiing Corp., 123 B.R. 753 (Bankr. W.D. Mich. 1991). · cites it 6× “Mich.Comp.Laws Ann. § 440.9306. Cliff’s Ridge Dev.”
GMAC Bus. Credit, L.L.C. v. Ford Motor Co. (In Re H.S.A. II, Inc.), 271 B.R. 534 (Bankr. E.D. Mich. 2002). · cites it 7× “Under Mich. Comp. Laws Ann. § 440.9306 (Supp.1992), the creditor’s lien interest continues in the proceeds of any sale.”
Frank v. ITT Com. Fin. Corp. (In Re Thompson Boat Co.), 230 B.R. 815 (Bankr. E.D. Mich. 1995). · cites it 8× “2d 900 (quoting Mich. Comp. Laws § 440.9306 (1), which states in part that proceeds in the form of “deposit accounts! ] and the like are ‘cash proceeds’” ).”
Hugo v. United States Ex Rel. Farmers Home Admin. (In Re Hugo), 50 B.R. 963 (Bankr. E.D. Mich. 1985). · cites it 4× “In other words, proceeds of collateral which in itself constitutes proceeds subject to the security agreement remain covered.”
Michigan Nat'l Bank v. Michigan Livestock Exch., 439 N.W.2d 884 (Mich. 1989). · cites it 4× “[18] MCL 440.9306; MSA 19.9306. [19] The Kearney approach is also, as noted above and on pp 281-282, the common-law rule in the great majority of jurisdictions, and defendant has not asked us to revise it.”
Wonsey v. Life Ins. Co. of North Am., 32 F. Supp. 2d 939 (E.D. Mich. 1998). · cites it 2× “§ 440.9306. In the instant case, payments are to be made pursuant to a structured settlement agreement entered into between plaintiff Chad Wonsey’s parents and the Insurance Company of North America (INA).”
In Re Dunn, 215 B.R. 121 (Bankr. E.D. Mich. 1997). · cites it 2× “”) Mich. Comp. Laws Ann. § 440.9306 (1) (West 1994) ("'Proceeds’ includes whatever is received upon .”
Hugo v. United States Ex Rel. Farmers Home Admin. (In Re Hugo), 58 B.R. 903 (Bankr. E.D. Mich. 1986). · cites it 2× “However, the plaintiffs then argued that even though the proceeds were traceable, the FmHA could trace its collateral only to the extent allowed by Mich.Comp.Laws § 440.9306(4)(d)(ii); Mich.”
Bank of Lansing v. Barkley (In Re Barkley), 31 B.R. 924 (Bankr. W.D. Mich. 1983). · cites it 3× “§ 440.9306(1)]. Therefore, no distinction between money and checks is necessary or significant.”
Motobecane Am., Ltd. v. Patrick Petroleum Co., 600 F. Supp. 1419 (E.D. Mich. 1985). · cites it 2× “§ 440.9306, which provides in pertinent part as follows: Sec.”
FMB-First Michigan Bank v. Van Rhee, 681 F. Supp. 1264 (W.D. Mich. 1987). “§ 440.9306(1), and that as such the monies are subject to their security interest.”
Show all 22 citing cases →
— Mich. Comp. Laws § 440.9306(1) — 6 cases
Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999). “[MCL 440.9306; MSA 19.9306. (emphasis added)] This case presents the following question of first impression under Michigan law: Are the proceeds of a specific item of collateral “identifiable” when the proceeds are part of a lump-sum cash payment that includes cash paid for…”
Hugo v. United States Ex Rel. Farmers Home Admin. (In Re Hugo), 50 B.R. 963 (Bankr. E.D. Mich. 1985). “In other words, proceeds of collateral which in itself constitutes proceeds subject to the security agreement remain covered.”
FMB-First Michigan Bank v. Van Rhee, 681 F. Supp. 1264 (W.D. Mich. 1987). “§ 440.9306(1), and that as such the monies are subject to their security interest.”
Delbridge v. Prod. Credit Ass'n & Fed. Land Bank, 104 B.R. 824 (E.D. Mich. 1989).
Warner v. Tarver, 405 N.W.2d 109 (Mich. Ct. App. 1986).
— Mich. Comp. Laws § 440.9306(2) — 3 cases
Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999). “[MCL 440.9306; MSA 19.9306. (emphasis added)] This case presents the following question of first impression under Michigan law: Are the proceeds of a specific item of collateral “identifiable” when the proceeds are part of a lump-sum cash payment that includes cash paid for…”
GMAC Bus. Credit, L.L.C. v. Ford Motor Co. (In Re H.S.A. II, Inc.), 271 B.R. 534 (Bankr. E.D. Mich. 2002). “Under Mich. Comp. Laws Ann. § 440.9306 (Supp.1992), the creditor’s lien interest continues in the proceeds of any sale.”
Matter of Special Abrasives, Inc., 26 B.R. 399 (Bankr. E.D. Mich. 1983).
— Mich. Comp. Laws § 440.9306(3) — 1 case
Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999). “[MCL 440.9306; MSA 19.9306. (emphasis added)] This case presents the following question of first impression under Michigan law: Are the proceeds of a specific item of collateral “identifiable” when the proceeds are part of a lump-sum cash payment that includes cash paid for…”
— Mich. Comp. Laws § 440.9306(3)(b) — 1 case
First Bank, Upper Michigan v. North Country Bank & Trust (In Re Superior Used Cars, Inc.), 258 B.R. 680 (Bankr. W.D. Mich. 2001).
— Mich. Comp. Laws § 440.9306(4) — 5 cases
Hugo v. United States Ex Rel. Farmers Home Admin. (In Re Hugo), 50 B.R. 963 (Bankr. E.D. Mich. 1985). “In other words, proceeds of collateral which in itself constitutes proceeds subject to the security agreement remain covered.”
Conagra, Inc v. Farmers State Bank, 602 N.W.2d 390 (Mich. Ct. App. 1999). “[MCL 440.9306; MSA 19.9306. (emphasis added)] This case presents the following question of first impression under Michigan law: Are the proceeds of a specific item of collateral “identifiable” when the proceeds are part of a lump-sum cash payment that includes cash paid for…”
Bank of Lansing v. Barkley (In Re Barkley), 31 B.R. 924 (Bankr. W.D. Mich. 1983). “§ 440.9306(1)]. Therefore, no distinction between money and checks is necessary or significant.”
Borock v. NBD Dearborn Bank, N.A. (In re D.J. Maltese, Inc.), 42 B.R. 589 (E.D. Mich. 1984).
Matter of DJ Maltese, Inc., 42 B.R. 589 (Bankr. E.D. Mich. 1984).
— Mich. Comp. Laws § 440.9306(4)(d)(i) — 1 case
Frank v. ITT Com. Fin. Corp. (In Re Thompson Boat Co.), 230 B.R. 815 (Bankr. E.D. Mich. 1995). “2d 900 (quoting Mich. Comp. Laws § 440.9306 (1), which states in part that proceeds in the form of “deposit accounts! ] and the like are ‘cash proceeds’” ).”
— Mich. Comp. Laws § 440.9306(4)(d)(ii) — 1 case
Hugo v. United States Ex Rel. Farmers Home Admin. (In Re Hugo), 58 B.R. 903 (Bankr. E.D. Mich. 1986). “However, the plaintiffs then argued that even though the proceeds were traceable, the FmHA could trace its collateral only to the extent allowed by Mich.Comp.Laws § 440.9306(4)(d)(ii); Mich.”
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