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UCC §9-105 Compliance

Loyva's compliance engine automates the requirements of UCC §9-105 (Uniform Commercial Code, Article 9, Section 105), which governs the control of electronic chattel paper.

What is electronic chattel paper?​

Chattel paper is a record that evidences both a monetary obligation and a security interest in goods. Common examples:

  • Equipment leases
  • Vehicle financing agreements
  • Secured installment contracts

When these records exist electronically (rather than on paper), they must meet specific requirements to establish "control" — the electronic equivalent of physical possession.

Why it matters​

Under UCC §9-105, a secured party has control of electronic chattel paper only if a system reliably establishes the secured party as the entity to which the chattel paper was assigned. Loyva evaluates 8 structured checks that together cover every element of the statute.

Without proper control:

  • The secured party's security interest may not be perfected
  • Priority disputes with other creditors may be lost
  • The electronic record may not be enforceable

Loyva's approach​

Loyva automates compliance through:

  1. Vault pipeline — Automatically stores signed documents as tamper-evident authoritative copies (ucc-vault) with SHA-256 hashing
  2. Compliance engine — Evaluates all 8 checks after every signature event and on demand
  3. Compliance certificates — Generates a machine-readable JSON certificate alongside each authoritative copy
  4. Custody chain — Tracks transfers of control between parties via custodian_permissions
  5. Authoritative version history — Every replacement of an authoritative copy is retained in authoritative_versions so the full revision chain is preserved
  6. Integrity re-verification — A weekly Cloudflare Worker cron re-downloads every vaulted PDF, re-hashes it, and appends the result to integrity_check_history
  7. Tamper-evident audit log — audit_logs and vault_access_logs are hash-chained (each row hashes the previous row's hash) for post-hoc tamper detection

Compliance score​

Each envelope receives a compliance score from 0 to 100:

ScoreMeaning
100Fully compliant — all 8 checks pass
1–99Partially compliant — some checks failing
0Not evaluated or no checks passing

Only a score of 100 means the envelope is UCC §9-105 compliant. The score is computed as round((satisfied_checks / 8) * 100).

Next steps​