No, we are not aware of any laws prohibiting you from enforcing a security agreement that secures business credit card debt. For example, Regulation Z’s limitations on securing credit card debt with a borrower’s deposit account apply only to consumer debts. 

Also, we note that courts in Illinois generally have upheld cross-collateralization clause, provided that they are “clear and unambiguous.” However, we cannot opine on whether this cross-collateralization clause would be enforceable without reviewing the relevant loan agreements. 

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.12(d)(1) (“A card issuer may not take any action, either before or after termination of credit card privileges, to offset a cardholder’s indebtedness arising from a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer.”)

• Universal Guar. Life Ins. Co. v. Coughlin, 481 F.3d 458, 463 (7th Cir. 2007) (“Dragnet clauses are not favored in Illinois, but they are enforceable if they are clear and unambiguous.”) (Cross-collateral provisions often are referred to as a “dragnet clause” or “anaconda clause.”)

• Illinois Uniform Commercial Code, 810 ILCS 5/9-204(c) (“A security agreement may provide that collateral secures . . . future advances or other value, whether or not the advances or value are given pursuant to commitment.”)