Utah protects certain digital record buyers and ranks lenders' claims

Eligible buyers receive protection against competing property claims, and lenders with control rank ahead of competing lenders without control. Covered digital records must meet the legal control test. Bank accounts, electronic money, and investment property follow separate rules. Protected buyers must give value, act in good faith, obtain control, and lack notice of another person's property claim. Protection generally does not erase claims to separate property represented by the record; covered payment rights have specific exceptions. Applicable consumer laws still govern. The law took effect May 6, 2026; separate transition rules apply to earlier claims.

People owing covered payments can request transfer proof. Lenders must return control of covered digital records after repayment when the required conditions are met. The payment rules cover debts tied to digital records that direct payment to whoever controls the record. A valid transfer notice must be signed, identify the payment right and recipient, and provide a reasonable payment method. Before notice is sent, the payer and current holder must agree in a signed record on a reasonable method for proving a transfer. Payers can reject instructions to split payments. Other consumer protections and enforceable limits on paying a different person still apply. Return of control requires no unpaid secured obligation or commitment to provide further value. Buyers of the covered payment rights are excluded. A valid transfer notice changes who can receive payment that clears the debt. Covered lenders must return control within 10 days after receiving the borrower's signed demand.

People can use signed electronic records for covered agreements. Sales and lease rules apply to mixed deals according to whether goods are the main part. Mixed deals combine sales or leases of goods with services or other property. Separate laws protecting consumers and farmers remain applicable. An electronic signature must show a present intent to authenticate or adopt the record. When goods are the main part, sales or lease rules apply to the deal, while other law may govern its other parts. When goods are not the main part, only rules mainly concerning goods apply; specified finance-lease rules still apply. The law took effect May 6, 2026. Its general saving rule preserves valid earlier agreements, apart from separate rules for property backing debts and digital records.

Banks and customers can agree on payment-security methods, but a familiar sending address or number alone does not qualify. These rules cover bank payment orders governed by the funds-transfer chapter. Agreed methods may use encryption, callbacks, or biometrics. To bind a customer to an unauthorized order under this rule, the bank must prove good faith and compliance with its agreed security duties and applicable recorded customer instructions. The security method must be commercially reasonable, based on the customer's circumstances and payment activity. These rules took effect May 6, 2026, and also apply to changes and cancellations of payment orders.

Holders of earlier claims must meet applicable transition requirements to retain enforceable claims and protection against competing claims. These rules cover earlier claims to property backing debts. Special ranking rules cover the defined digital records, linked payment rights, and electronic money. An earlier enforceable claim already protected against competing claims continues automatically if it meets the law's requirements. Otherwise, that protection lasts until its earlier expiration or May 6, 2027, whichever comes first. Continued protection requires timely compliance. Cases begun before May 6, 2026, are unaffected. May 6, 2027, is the adjustment date. Specified earlier claim rankings stop applying then if the law assigns a different priority.