55-4-211: When bank gives value for purposes of holder in due course.

For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of Section 55-3-302 NMSA 1978 on what constitutes a holder in due course.

OFFICIAL COMMENTS

UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

The section completes the thought of the previous section and makes clear that a security interest in an item is "value" for the purpose of determining the holder's status as a holder in due course. The provision is in accord with the prior law (N.I.L. Section 27) and with Article 3 (Section 3-303) [55-3-303 NMSA 1978]. The section does not prescribe a security interest under Section 4-210 [55-4-210 NMSA 1978] as a test of "value" generally because the meaning of "value" under other Articles is adequately defined in Section 1-201 [55-1-201 NMSA 1978].