Section 9--620. Acceptance of Collateral in Full or Partial Satisfaction

of Obligation; Compulsory Disposition of Collateral.

(a) Conditions to acceptance in satisfaction. Except as otherwise
provided in subsections (g) and (h), a secured party may accept
collateral in full or partial satisfaction of the obligation it secures
only if:

(1) the debtor consents to the acceptance under subsection (c);

(2) the secured party does not receive, within the time set forth

in subsection (d), a notification of objection to the

proposal authenticated by:

(A) a person to which the secured party was required to send

a proposal under Section 9--621; or

(B) any other person, other than the debtor, holding an

interest in the collateral subordinate to the security

interest that is the subject of the proposal;

(3) if the collateral is consumer goods, the collateral is not in

the possession of the debtor when the debtor consents to the

acceptance; and

(4) subsection (e) does not require the secured party to dispose

of the collateral or the debtor waives the requirement

pursuant to Section 9--624.

(b) Purported acceptance ineffective. A purported or apparent
acceptance of collateral under this section is ineffective unless:

(1) the secured party consents to the acceptance in an

authenticated record or sends a proposal to the debtor; and

(2) the conditions of subsection (a) are met.

(c) Debtor's consent. For purposes of this section:

(1) a debtor consents to an acceptance of collateral in partial

satisfaction of the obligation it secures only if the debtor

agrees to the terms of the acceptance in a record

authenticated after default; and

(2) a debtor consents to an acceptance of collateral in full

satisfaction of the obligation it secures only if the debtor

agrees to the terms of the acceptance in a record

authenticated after default or the secured party:

(A) sends to the debtor after default a proposal that is

unconditional or subject only to a condition that

collateral not in the possession of the secured party be

preserved or maintained;

(B) in the proposal, proposes to accept collateral in full

satisfaction of the obligation it secures; and

(C) does not receive a notification of objection

authenticated by the debtor within twenty days after the

proposal is sent.

(d) Effectiveness of notification. To be effective under subsection
(a)(2), a notification of objection must be received by the secured
party:

(1) in the case of a person to which the proposal was sent

pursuant to Section 9--621, within 20 days after notification

was sent to that person; and

(2) in other cases:

(A) within 20 days after the last notification was sent

pursuant to Section 9--621; or

(B) if a notification was not sent, before the debtor

consents to the acceptance under subsection (c).

(e) Mandatory disposition of consumer goods. A secured party that has
taken possession of collateral shall dispose of the collateral pursuant
to Section 9--610 within the time specified in subsection (f) if:

(1) sixty percent of the cash price has been paid in the case of

a purchase-money security interest in consumer goods; or

(2) sixty percent of the principal amount of the obligation

secured has been paid in the case of a non-purchase-money

security interest in consumer goods.

(f) Compliance with mandatory disposition requirement. To comply with
subsection (e), the secured party shall dispose of the collateral:

(1) within 90 days after taking possession; or

(2) within any longer period to which the debtor and all

secondary obligors have agreed in an agreement to that effect

entered into and authenticated after default.

(g) No partial satisfaction in consumer transaction. In a consumer
transaction, a secured party may not accept collateral in partial
satisfaction of the obligation it secures.

(h) Special provisions for cooperative interests. A secured party
whose collateral consists of a residential cooperative interest used by
the debtor and whose security interest in such collateral secures an
obligation incurred in connection with financing or refinancing of the
acquisition of such cooperative interest and who chooses to accept that
cooperative interest in full satisfaction of the debtor's obligation may
do so.

(1) If the secured party sends a proposal to take the cooperative
interest in full satisfaction of the debtor's obligation, the proposal
shall be accompanied by a notice in the form and manner prescribed in
subsection (f) of section 9-611 of this subpart, unless the secured
party has previously sent the debtor such notice. A debtor consents to
an acceptance of a cooperative interest in full satisfaction of the
obligation it secures only if the debtor agrees to the terms of the
proposal in a record authenticated after default.

(2) A debtor may propose to the secured party that it take the
cooperative interest in full satisfaction of the obligation it secures.
The proposal shall be ineffective unless the secured party consents to
the proposal in an authenticated record.