Active Deposit Account Control Agreement – A control agreement that orders the bank to accept the instructions of the secured party (not the debtor). Instructions – An instruction to the bank that manages the sale of funds in the account. Debtor (client) – As one of the three parts of the DACA, the debtor provides the security and receives the deposits into the deposit account. Regions have a centralized and experienced account control team that can offer a number of benefits to lenders and clients as well as their law firms. The first instruction — An instruction given to the bank comes from the lender, which orders it to stop following the debtor`s instructions. The initial statement often contains a disposition order from the secure part, which allows the insured party to manage the flow of money from the deposit account. The establishment of a deposit account control agreement allows lenders to upgrade their interest on a debtor`s deposit account (UCC No. 9-104) and to define the disposition instructions (transfer instructions) addressed to the bank with respect to the controlled account or accounts. A deposit account control agreement (DACA), also known as a control agreement, is a tripartite agreement between a deposit client (the debtor), a client`s lender (the guaranteed party) and a bank. First, there are two types of account control agreements: assets and liabilities. UCC No. 9-104 — The “Single Code of Trade” section that deals with deposit account control.
This section enhances the security interests on deposit accounts as an original guarantee. Advanced Security Interests – During the execution of the DACA, the insured party will be granted an advanced security interest that granted it, under the Single Code of Commerce, exclusive rights to control the debtor`s deposit account. Deposit Account Control Agreement (DACA) – A tripartite agreement between a client (debtor), an insured party (lender) and a bank that allows the lender to enhance a security interest in the client`s funds by taking control of the deposit account (UCC No. 9-104). Secure Part (Lender) – part of a DACA that borrows funds and obtains a perfect security interest on the debtor`s deposit account when executing the contract. Why do lenders use account management agreements? Clients often do not host their deposits with their lenders and some lenders do not offer deposit accounts. Lenders enter into deposit account control agreements such as an additional level of default protection and loan repayment assistance. For more information on DACA regions: Contact your regional cash management or relationship manager, call the DACA Central Team at 1-877-453-DACA (1-877-453-3222) or email DACA@regions.com.