NCJ Number
49362
Journal
American Business Law Journal Volume: 15 Issue: 3 Dated: (WINTER 1978). P 319-335
Date Published
1978
Length
17 pages
Annotation
THE NEED TO REFORM ARTICLE 9 OF THE UNIFORM COMMERICAL CODE, WHICH ALLOWS REPOSSESSION OF COLLATERAL WITHOUT A SEARCH WARRANT, NOTIFICATION OF THE DEBTOR, OR DUE PROCESS, IS DISCUSSED.
Abstract
IN THE 1940'S, THE ORIGINAL DRAFTERS OF ARTICLE 9 WERE CREDITOR-ORIENTED AND HAD LITTLE REGARD FOR DUE PROCESS. THE 1972 REVISIONS WERE CONCERNED PRIMARILY WITH UNIFORMITY OF DEFAULT PROCEDURES AND NOT AN INCREASE IN CONSUMER PROTECTION. AS A RESULT, A DEBTOR'S PROPERTY CAN BE--AND OFTEN IS--MISTAKENLY OR ARBITARILY CONFISCATED. THE ONLY LIMITATION ON THE CREDITOR IS THAT THE PEACE MAY NOT BE BREACHED. AS A RESULT, CREDITORS HAVE PERSUADED SMALL CHILDREN TO UNLOCK BUILDINGS TO ALLOW PROPERTY SEIZURE, DUPLICATE KEYS HAVE BEEN MADE AND USED TO ENTER THE DEBTOR'S PREMISES WITHOUT NOTICE, AND CARS HAVE BEEN DRIVEN AWAY FROM THE DEBTOR'S DRIVEWAY. UNDER ARTICLE 9 NOTICE IS NOT REQUIRED, DEFFAULT IS NOT DEFINED, CONSENT TO TRESPASS IS NOT REQUIRED, BREACH OF THE PEACH IS NOT OUTLINED, AND AN UNDERSTANDABLE REPOSSESSION CLAUSE IS NOT REQUIRED IN THE CONTRACT. PERSONS ARE USUALLY UNAWARE OF THE RIGHTS THEY HAVE WAIVED UNTIL IT IS TOO LATE. COURT DECISIONS HAVE GRADUALLY EXTENDED DUE PROCESS REQUIREMENTS, BUT THE PROCESS IS SLOW AND DAMAGE IS OFTEN GREAT TO THE POOR PERSON WHO CAN ILL AFFORD TO LOSE THE PROPERTY. AN ATTEMPT TO IMPOSE 14TH AMENDMENT DUE PROCESS REQUIREMENTS IN SUCH CASES FAILED WHEN THE U.S. SUPREME COURT REFUSED TO HEAR BENSCHOTER V. FIRST NATIONAL BANK OF LAWRENCE. LEGISLATIVE ACTION IS URGED. THE UNIFORM CONSUMER CREDIT CODE IS CITED AS THE MOST COMPREHENSIVE APPROACH TO THE PROBLEM. PASSAGE OF THIS OR SIMILAR LEGISLATION IS ESSENTIAL TO PROTECT CONSUMERS FROM HARASSMENT. FEDERAL TRADE COMMISSION PROPOSALS ARE SUMMARIZED. REFERENCES ARE FOOTNOTED. COURT DECISIONS ARE NOTED. (GLR)