Deposit Account Control Agreement (DACA) – A tripartite agreement between a customer (debtor), a secured party (lender) and a bank allowing the lender to perfect a security interest in the customer`s funds by taking control of the current account (UCC § 9-104). In the first place, there are two types of deposit account control agreements: assets and liabilities. Debtor (customer) – As one of the three parts of the DACA, the debtor provides the guarantees and receives the deposits in the current account. A tripartite agreement comprising a borrower, a lender and a deposit-financed institution or institution, known as a deposit control agreement. These three parties play an important role in defining the terms of the DACA agreement. The agreement can also be seen as a useful document for the lender, as it allows the lender to have a safe deposit on the borrower`s deposit accounts with the same bank or another financial institution. Cash is an extremely important guarantee for any financial institution or bank. The lender always wants to get a better return on the borrower`s deposits. It is important to keep in mind when we talk about DACA, which means that it can be in two ways, one blocked by a control agreement that gives the lender full rights to the borrower`s fiduciary account and prohibits the borrower from accessing the funds. The other is Spring, which allows the borrower to access their deposit account (accounts) as long as there is a default situation and lenders Why do lenders use deposit account control agreements? Often, customers do not host their deposits with their lenders and some lenders do not offer deposit accounts. Lenders enter into deposit account control agreements as additional protection against defaults and to help repay their loans. The establishment of a deposit account control agreement allows lenders to perfect their interest in a debtor`s current accounts (UCC § 9-104) and to define who can introduce disposition instructions (transfer instructions) to the bank in respect of the controlled current account(s). Active Deposit Account Control Agreement – A control agreement that has instructed the bank to receive disposition instructions from the secured party (not the debtor).
Advanced Security Interest – Once the DACA is executed, the secured party will be granted an advanced collateral right which, in accordance with the Single Commercial Code, gives it the exclusive right to control the debtor`s current account. UZK § 9-104 – The section of the Single Commercial Code that deals with “checking the current account”. This section helps to perfect the security interests on deposit accounts as an original guarantee. A Deposit Account Control Agreement (DACA), also known as a Control Agreement, is a tripartite agreement between a deposit customer (the debtor), a deposit customer`s lender (the secured party) and a bank. Disposition Instructions – An instruction to the bank that manages the disposition of funds on the current account. Regions has an experienced and centralized deposit account control team, which can offer a number of benefits to lenders and clients as well as their law firms. Deposit accounts at BMO Harris Bank N.A.