§ 18-441-604 — Security interest and set-off.

SECURITY INTEREST AND SET-OFF. (a) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association. (b) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member’s governance rights in a limited cooperative association. (c) The organic rules may provide that a limited cooperative association has a security interest in the financial rights of a member to secure payment of any indebtedness or other obligation of the member to the association. A security interest provided for in the organic rules is enforceable under, and governed by, Article 9 of the Uniform Commercial Code. (d) Unless the organic rules otherwise provide, a member may not compel the limited cooperative association to offset financial rights against any indebtedness or obligation owed to the association.

Legislative History

Added by Laws 2009, c. 68, § 60, eff. Jan. 1, 2010.