When it comes to guarantees for a loan, money is king. All other forms of collateral require liquidation, which involves time, effort and uncertainty for the lender. To complete a security interest on a deposit account, the lender must set up the „control“ of that account. This article explains how to obtain this control and the most important concepts to be included in a control agreement. Each custodian bank often has its own form of DACA, although the above elements are common to each form. The DAC is the subject of discussions and negotiations. Therefore, borrowers and lenders should be aware that it may take some time before a DACA is agreed and signed by all parties, so that the lender can obtain a perfect security interest on a deposit account. It is important to note when we talk about DACA, which means it can be two types, one is a „blocked“ control agreement that gives the lender full rights to the borrower`s deposit funds and prohibits the borrower from accessing the funds. The other is „Springing,“ which allows the borrower to access his (s) deposit (s) until there is a default situation, and the lender provides exclusive notice of control to the custodian bank. Both DACA forms must be complied with.

The custodian or institute can also play an important role in the DACA; Finally, the lender arrives at the body in case of default. This proceeding will be subject to certain obligations vis-à-vis both parties. If they do not commit, the custodian can take important steps as a DaCA. Both the borrower and the lender should be aware of all the obligations of the institution. First, the borrower must take care of the type of control he wishes to give to the lender. In exchange for the loan, the lender must have a perfect security interest, but in most cases, the borrower also wants access to his deposit account. A deposit bank that signs a DACA agrees to follow the lender`s instructions regarding the borrower`s money paid, without the borrower taking further action or the borrower agreeing. Such an agreement gives the lender „control“ of the deposit account required for perfection under the UCC. The deposit point. In most cases, it has its own form of DACA.

The three parties involved should first negotiate on different terms. For the lender, the objective is to insure the loan it has granted to the borrower and the borrower does not want to risk the deposit funds. The two parties must find common ground and the former should ensure that there is no default on their part. According to the UCC, the lender still has to take some control over the deposit account, but at least the borrower will have access to its funds through such negotiations. Secure Part (Lender) – is part of a DACA that borrows funds and receives a perfect security interest rate on the debtor`s account when the contract is executed. The deposit body. In most cases, it has its own form of DACA. The three parties concerned should, first of all, negotiate on different terms and conditions in form. For the lender, the objective is to insure the loan it has granted to the borrower and the borrower does not want to risk the deposit funds.

The two parties must find common ground and the former should ensure that there is no default on their part. According to the UCC, the lender still needs to take some control over the deposit account, but at least the borrower will have access to its funds through such negotiations.