Vermont § 409 - § 9—409.

§ 409. § 9—409.

• Restrictions on assignment of letter-of-credit rights ineffective (a) A term in a letter of credit or a rule of law, statute, regulation, custom, or practice
  applicable to the letter of credit which prohibits, restricts, or requires the consent
  of an applicant, issuer, or nominated person to a beneficiary’s assignment of or creation
  of a security interest in a letter-of-credit right is ineffective to the extent that
  the term or rule of law, statute, regulation, custom, or practice: (1) would impair the creation, attachment, or perfection of a security interest in the
  letter-of-credit right; or (2) provides that the assignment or the creation, attachment, or perfection of the security
  interest may give rise to a default, breach, right of recoupment, claim, defense,
  termination, right of termination, or remedy under the letter-of-credit right. (b) To the extent that a term in a letter of credit is ineffective under subsection (a)
  of this section but would be effective under law other than this article or a custom
  or practice applicable to the letter of credit, to the transfer of a right to draw
  or otherwise demand performance under the letter of credit, or to the assignment of
  a right to proceeds of the letter of credit, the creation, attachment, or perfection
  of a security interest in the letter-of-credit right: (1) is not enforceable against the applicant, issuer, nominated person, or transferee
  beneficiary; (2) imposes no duties or obligations on the applicant, issuer, nominated person, or transferee
  beneficiary; and (3) does not require the applicant, issuer, nominated person, or transferee beneficiary
  to recognize the security interest, pay or render performance to the secured party,
  or accept payment or other performance from the secured party. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001.)