FINAL BILL REPORT

SB 5079

                              C 13 L 89

BYSenators Pullen and Talmadge

Discussing variable interest rates in relation to the uniform commercial code.

Senate Committee on Law & Justice

House Committe on Judiciary

SYNOPSIS AS ENACTED

BACKGROUND:

Under current law, promissory notes and other instruments are required to have stated interest or stated installments to be negotiable instruments under the Uniform Commercial Code (UCC).  At the present time most mortgages, commercial loans, and personal loans have variable interest rates or variable installment payments.  It is suggested that the UCC be amended to ensure that instruments with variable rates or variable payments are negotiable instruments. 

SUMMARY:

Language defining negotiable instruments under the UCC is amended to include instruments which have variable interest rates or variable installment payments.

A variable rate of interest is a "stated interest" if the rate is readily ascertainable.

Graduated, variable, annuity or price-level adjusted payments are "stated installments."

VOTES ON FINAL PASSAGE:

     Senate   47    0

     House 96  0

EFFECTIVE:July 23, 1989