HP0377, LD 533, item 1, An Act To Clarify the Application of the Statute of Limitations under Article 3-A of the Uniform Commercial Code

An Act To Clarify the Application of the Statute of Limitations under Article 3-A of the Uniform Commercial Code

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 11 MRSA §3-1118, sub-§(1), as enacted by PL 1993, c. 293, Pt. A, §2, is amended to read:

(1). Except as provided in subsection (5), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within 6 years after the due date or dates stated in the note or, if a due date is accelerated, within 6 years after the accelerated due date. This subsection applies to all negotiable instruments, notwithstanding any statute of limitations of differing length set forth in any other statute.

Sec. 2. Notice. Promptly after the effective date of this Act, the Department of Professional and Financial Regulation, Bureau of Financial Institutions and Bureau of Consumer Credit Protection shall give written notice of the provisions of this Act to all financial institutions, mortgage servicers and debt collectors regulated by or registered with them and to other entities and agencies that have interests in loans that may be affected by this Act.

Sec. 3. Application. This Act does not apply to a negotiable instrument that exists on the effective date of this Act and that is subject to a statute of limitations longer than 6 years prior to the effective date of this Act until 90 days after the effective date of this Act.

summary

The Maine Revised Statutes, Title 11, section 3-1118, subsection (1) in Article 3-A of the Uniform Commercial Code, which governs negotiable instruments, provides for a 6-year statute of limitations for enforcement of negotiable instruments. In 2004, the Maine Supreme Judicial Court sitting as the Law Court held in Fleet National Bank v. Liberty, 2004 ME 36, 845 A.2d 1183, that Title 11, section 3-1118, subsection (1) did not repeal the 20-year statute of limitations for some types of instruments in Title 14, section 751, either expressly or by implication. This bill provides that the 6-year statute of limitations in Title 11, section 3-1118, subsection (1) applies to all negotiable instruments, notwithstanding the 20-year statute of limitations for some types of instruments in Title 14, section 751.

This bill also provides that the 6-year statute of limitations does not apply to certain negotiable instruments until 90 days after the legislation takes effect. It requires the Department of Professional and Financial Regulation, Bureau of Financial Institutions and Bureau of Consumer Credit Protection to give written notice to all financial institutions, mortgage servicers and debt collectors regulated by or registered with them and to other entities and agencies that have interests in loans that may be affected by this legislation.

HP0377 LD 533	Session - 128th Maine Legislature		LR 1683 Item 1
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