Deposit Account Control Agreement (Daca)

Each custodian bank often has its own form of DACA, although the elements listed above of any form are common. AACs are discussed and negotiated. Therefore, borrowers and lenders should realize that it may take some time before a DACA is agreed and signed by all parties for the lender to benefit from an advanced security interest for a deposit account. Deposit account control agreements (CAAs) are too often little taken into account by a deposit-taking institution that signs them. It is all too common for a deposit-taking institution to lack appropriate controls, including the appointment of legal counsel, if any, to protect the deposit-taking institution`s interests when signing and implementing an ACA. This is in stark contrast to lenders who typically commission a consultant to carefully review and process DACA to ensure that the lender`s security interests in deposit accounts are refined and that the DACA commitment is transferred to the deposit-taking institution. The result is that a deposit-taking institution may expose itself to a significantly higher number of risks than necessary when closing CADs. A lender may establish “control” in one of the following ways: (i) the borrower maintains his or her deposit account directly with the lender; 2. the lender becomes the beneficial owner of the borrower`s deposit accounts with the borrower`s custodian banks; or (3) the lender and borrower enter into a deposit account control agreement (known as DACA) with the borrower`s custodian bank. In any case, these agreements apply in addition to the hedging agreement by which the borrower grants a hedging interest for his current accounts. It is important for a deposit-taking institution to evaluate its DACA forms and DACA verification and implementation process from time to time to ensure that there are no unnecessary risks. 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.

Article 9 of the Uniform of Trade (UCC) defines a current account as a debt, savings account, savings account or similar account held with a bank. . . .