Notification of Assignment to a Securitisation Fund: Article 670 CPC Inapplicable – Cass. com., 4 March 2026, No. 24-22.392, Published in the Bulletin

French Supreme Court (Cour de cassation), Commercial, Financial and Economic Chamber, 4 March 2026, No. 24-22.392

The Legal Context of the Assignment of a Bank Receivable to a Securitisation Fund

Understanding what is at stake in this decision requires a look back at the securitisation mechanism and the obligations arising from it to protect the debtor’s rights. Indeed, when a mortgage loan changes hands, the debtor must not be left defenceless against an unknown creditor.

What is a securitisation fund (FCT)?

A securitisation fund (fonds commun de titrisation, FCT) is a financial vehicle created specifically to acquire receivables, often bank loans, and turn them into tradable financial securities. The aim for banks is to remove these receivables from their balance sheet, improve their liquidity and transfer the risk of borrower default to investors.

The FCT has no legal personality of its own. It is managed by a management company authorised by the Financial Markets Authority (Autorité des marchés financiers, AMF), which administers the fund and takes management decisions. Recovery of the receivables may be carried out directly by this management company or entrusted to a third-party entity specialised in amicable or judicial recovery.

For borrowers, this financial transaction can seem opaque: overnight, their counterparty changes. The bank with which they signed their contract is no longer their creditor. It is a fund, often unknown to the general public, that becomes the holder of the receivable and that may, if necessary, bring proceedings in the event of default.

The mechanism of assignment of a receivable: from the bank to the fund

The assignment of a receivable is the legal act by which the original creditor (assignor) transfers its receivable to a new creditor (assignee). In the case of securitisation funds, this assignment is governed by the Monetary and Financial Code (code monétaire et financier), which provides specific rules that derogate from ordinary law.

Under classic civil law, the assignment of a receivable is subject to strict formalities in order to be enforceable against the debtor: notification by bailiff’s act or acceptance in a notarial deed (Article 1690 of the Civil Code (code civil)). But in securitisation matters, the legislator wished to simplify and speed up these transactions in order to facilitate the financing of the economy.

Thus, Article L. 214-169 of the Monetary and Financial Code provides that the receivables acquired by the fund are assigned or transferred by operation of law to the FCT from the date of the assignment instrument, without further formalities. However, and this is where the whole subtlety lies, this simplification does not release the assignee from informing the debtor of the assignment. On the contrary, the legislator wished to maintain a minimum of transparency in order to protect the debtor’s rights.

In the case at hand, the receivable went through three successive assignments: first from Crédit Foncier de France to FCT Victor créances I in July 2017, then to FCT Hugo créances IV in December 2021, and finally to FCT Absus in December 2023. Each assignment in principle requires fresh information to the debtor.

The legal obligation to inform the assigned debtor

Article L. 214-172 of the Monetary and Financial Code forms the legal foundation of this information obligation. This text has had two successive wordings which deserve careful examination, because they shed light on the evolution of the legislator’s intent.

In its version resulting from Ordinance No. 2017-1432 of 4 October 2017, Article L. 214-172 provided that “all or part of the recovery of the receivables may be carried out directly by the management company or entrusted by it, by agreement, to another entity designated for that purpose. Each debtor is informed of this change.” The text remained silent on the practical arrangements for this information.

Faced with the questions raised by this silence and the resulting litigation, the legislator intervened with Law No. 2019-486 of 22 May 2019 to specify that “each debtor concerned is informed of this change by any means, including by judicial or extrajudicial act.” This express reference to “by any means” marks a deliberate intention to relax the arrangements for information and to validate more flexible practices than notification by bailiff.

In concrete terms, this means that the debtor may be informed by ordinary letter, registered letter with or without acknowledgment of receipt, email, text message, or even by a procedural document (such as a payment order or a summons) stating the identity of the new creditor. This flexibility aims to avoid blocking recovery on purely formal questions, while maintaining the requirement of effective information.

The Facts of the Case: A Chain of Multiple Assignments

The case decided by the French Supreme Court on 4 March 2026 perfectly illustrates the complexity of contemporary financial structures and the difficulties borrowers face in keeping track of the identity of their creditor through successive assignments.

The initial loan and the first assignment to FCT Victor

On 9 January 2008, Mr and Mrs J. took out a mortgage loan with Crédit foncier de France to finance the purchase of their home. This loan was secured by a contractual mortgage on the property acquired, as is customary for this type of financing.

Nearly ten years later, on 31 July 2017, Crédit foncier de France assigned this receivable to the securitisation fund Victor créances I. This assignment formed part of a larger securitisation transaction involving a portfolio of property receivables. The management company of FCT Victor was Equitis gestion (later renamed IQ EQ management), and the entity in charge of recovery was the company MCS et associés.

According to the documents in the file, Mr and Mrs J. were informed of this first assignment by ordinary letters dated 11 September 2017, repeated by registered letters with acknowledgment of receipt, the acknowledgments of receipt of which were signed on 24 April 2018. These letters stated the identity of the new creditor (FCT Victor) as well as that of the entity in charge of recovery (MCS et associés).

The successive assignments and the property seizure procedure

On 2 December 2021, there was a new assignment: FCT Victor créances I transferred the receivable to FCT Hugo créances IV. This time, the management company remained the same (IQ EQ management, formerly Equitis gestion), as did the entity in charge of recovery (MCS et associés, in the meantime renamed MCS TM).

Faced with the payment difficulties encountered by Mr and Mrs J., FCT Hugo créances IV decided to commence a property seizure procedure. A payment order amounting to a property seizure (commandement de payer valant saisie immobilière) was served on the debtors on 21 July 2020. This order expressly stated the identity of the creditor, of the management company and of the entity in charge of recovery.

On 9 January 2023, Mr and Mrs J. were summoned before the enforcement judge (juge de l’exécution) at a directions hearing, in accordance with the property seizure procedure provided for by Articles L. 311-1 et seq. of the Code of Civil Enforcement Procedures (code des procédures civiles d’exécution). In the meantime, on 21 December 2023, a third assignment had taken place: FCT Hugo créances IV had assigned the receivable to FCT Absus.

Mr and Mrs J. were also informed of this last assignment by two registered letters received on 6 January 2022 [this is probably an error in the judgment’s chronology, since the assignment dates from December 2023].

The borrowers’ challenge to the validity of the notifications

Faced with the property seizure procedure, Mr and Mrs J. challenged the validity of the information given to them concerning the successive assignments of the receivable. Their argument rested on several technical grounds.

First, they claimed never to have received the ordinary letters of 11 September 2017. In the absence of proof of receipt (since by definition an ordinary letter carries no acknowledgment of receipt), they argued that this first attempt at informing them had been unsuccessful.

Second, and this is their most technical argument, they challenged the validity of the registered letters of 24 April 2018 by pointing to an anomaly: the two acknowledgments of receipt bore the same signature. Yet the letters were addressed individually to each of the spouses. If one and the same person had signed both acknowledgments of receipt, this meant that one of the two debtors had not personally received the notification.

Mr and Mrs J. relied on Article 670 of the Code of Civil Procedure (code de procédure civile), which governs the arrangements for notification of procedural documents. Under this provision, notification is deemed made to the person where the acknowledgment of receipt is signed by the addressee himself, and it is deemed made at the home address where it is signed by a person holding authority to that effect. Failing that, the notification is not regular.

Applying this reasoning, the borrowers inferred that if the same person had signed both acknowledgments of receipt, then at least one of the two letters had not been validly notified, since the signatory could not be the addressee of both letters at once.

Third, Mr and Mrs J. criticised the Chambéry Court of Appeal (cour d’appel de Chambéry) for not responding to this decisive ground. By failing to address explicitly the question of the identity of the signatures on the two acknowledgments of receipt, the Court of Appeal had allegedly committed a failure to respond to submissions, equivalent to a lack of reasons and justifying the quashing of its judgment.

The Grounds Raised by the Debtors Before the French Supreme Court

The appeal on points of law lodged by Mr and Mrs J. before the French Supreme Court had four limbs, two of which were dismissed by application of Article 1014, paragraph 2, of the Code of Civil Procedure. This article allows the French Supreme Court to summarily reject complaints “manifestly not capable of leading to quashing”, without developing specific reasoning. Only the second and third limbs of the ground of appeal therefore received a reasoned answer.

The failure to respond to submissions on the identity of the signatures

In the second limb of their ground of appeal, Mr and Mrs J. alleged an infringement of Article 455 of the Code of Civil Procedure, which requires judges to respond to the parties’ submissions. They criticised the Chambéry Court of Appeal for failing to deal with their argument based on the identical signature appearing on the two acknowledgments of receipt of the registered letters of 24 April 2018.

This argument was, in their view, “decisive”: if one and the same person had signed both acknowledgments of receipt, it necessarily followed that one of the spouses had not personally been the recipient of the letter addressed to him or her. Consequently, the information given to that spouse was not valid, which made the recovery procedure against that spouse irregular.

Article 455 of the Code of Civil Procedure is a fundamental guarantee of the right to a fair trial. It provides that “every judgment must be reasoned” and that “a failure to respond to submissions constitutes a lack of reasons”. This obligation does not, however, require judges to respond to every argument developed by the parties, but only to those that are decisive, that is, capable of exerting a decisive influence on the outcome of the dispute.

Mr and Mrs J. considered that their ground on the identity of the signatures had this decisive character, since it called into question the very validity of the information on the assignment of the receivable and, consequently, the admissibility of the property seizure action brought against them.

The application of Article 670 of the Code of Civil Procedure

The third limb of the ground was of a different nature. It was no longer a matter of criticising the lower courts for failing to respond, but of challenging the legal analysis they had adopted. Mr and Mrs J. here alleged a lack of legal basis with regard to Article 670 of the Code of Civil Procedure.

Article 670 of the Code of Civil Procedure governs the arrangements for notification by registered letter. It provides that “notification is deemed made to the person where the acknowledgment of receipt is signed by the addressee. It is deemed made at the home or residence where the acknowledgment of receipt is signed by a person holding authority to that effect.” This provision aims to ensure that the addressee of a procedural document has actually been informed.

According to the appellants, the Court of Appeal should have applied these strict rules to the registered letters of 24 April 2018 informing Mr and Mrs J. of the assignment of the receivable. Yet, by merely holding that “the address stated was correct” and that nothing made it possible “to cast doubt on the receipt of these letters”, without checking whether the acknowledgments of receipt had been signed by the addressees themselves or by a person holding authority, the Court of Appeal allegedly deprived its decision of a legal basis.

This argument raised an interesting legal question: does Article 670 of the Code of Civil Procedure, which strictly governs the notification of procedural documents, also apply to the information of the assigned debtor provided for by Article L. 214-172 of the Monetary and Financial Code? In other words, are the arrangements for informing the debtor in the context of an assignment of a receivable to a securitisation fund subject to the same formal requirements as the notification of a summons or a judgment?

The French Supreme Court’s Position: Validation of Information “by Any Means”

In its judgment of 4 March 2026, the Commercial, Financial and Economic Chamber of the French Supreme Court dismisses the appeal lodged by Mr and Mrs J. and upholds the decision of the Chambéry Court of Appeal. This dismissal rests on a clear and liberal interpretation of the arrangements for informing the debtor in matters of assignment of a receivable to a securitisation fund.

The legal framework restated: Article L. 214-172 of the Monetary and Financial Code

The French Supreme Court begins by recalling the textual basis of the obligation to inform the assigned debtor. It cites Article L. 214-172 of the Monetary and Financial Code in its two successive wordings, thereby demonstrating the evolution of the legislative intent towards a relaxation of the arrangements for information.

In its version resulting from the Ordinance of 4 October 2017, the text simply provided that “each debtor is informed of this change”, without specifying how this information was to be given. This imprecision had raised questions: should the strict rules on the notification of procedural documents apply? Was a simple letter sufficient? Was an email valid?

The Law of 22 May 2019 removed these uncertainties by specifying that the information is given “by any means, including by judicial or extrajudicial act”. This broad wording marks a clear intention of the legislator not to hamper the recovery of assigned receivables with excessive formalities, while maintaining the requirement of effective information of the debtor.

The French Supreme Court draws an important consequence from this: the arrangements for information provided for by Article L. 214-172 are autonomous and are not subject to the strict rules on the notification of procedural documents laid down by the Code of Civil Procedure. This is a derogatory regime, justified by the specific nature of securitisation transactions and by the need not to paralyse the credit market.

The multiplication of means of notification: ordinary letters, registered letters, payment order

The French Supreme Court then notes that Mr and Mrs J. were informed of the assignments of the receivable and of the identity of the entity in charge of recovery by a multiplicity of converging means. This accumulation of notifications, even if some of them might individually be open to debate, ultimately establishes effective and incontestable information.

First means: the ordinary letters of 11 September 2017. Even though Mr and Mrs J. denied having received these letters, their dispatch is established and they constitute a first act of information. It is true that the absence of proof of receipt weakens the evidential value of these letters, but they form part of a body of evidence demonstrating the assignee’s intention to inform the debtors.

Second means: the registered letters with acknowledgment of receipt of 24 April 2018. The acknowledgments of receipt were indeed signed and returned, attesting to the effective delivery of the letters to Mr and Mrs J.’s address. The Court of Appeal noted that the address stated was correct and that no probative evidence made it possible to doubt the receipt of the letters. Even if the two acknowledgments of receipt bear similar signatures, this is not enough to call into question the reality of the information.

Third means: the payment order amounting to a property seizure served on 21 July 2020. This bailiff’s act expressly stated the identity of the creditor (FCT Hugo créances IV), of the management company (IQ EQ management) and of the entity in charge of recovery (MCS et associés). A payment order is a solemn act, served by a bailiff with all the guarantees of form and substance provided for by law. In itself it constitutes a perfectly valid means of informing the debtor.

Fourth means: the registered letters received on 6 January 2022, which informed Mr and Mrs J. of the subsequent assignments. Here again, the receipt of these letters is established and is not seriously disputed.

Faced with this accumulation of successive and consistent notifications, the French Supreme Court considers that the debtors cannot legitimately maintain that they were unaware of the assignment of the receivable and of the identity of the entity in charge of recovery. The information was given “by any means”, in accordance with the requirements of Article L. 214-172.

The inapplicability of Article 670 of the Code of Civil Procedure

The most important point of the judgment lies in the statement that “the provisions of Article 670 of the Code of Civil Procedure were inapplicable in this case”. This formula, apparently technical, carries considerable legal significance.

Article 670 of the Code of Civil Procedure governs the arrangements for notification of procedural documents by registered letter. It imposes strict requirements: notification is deemed made to the person if the addressee signs the acknowledgment of receipt himself, and it is deemed made at the home address if the acknowledgment of receipt is signed by a person holding authority. Failing that, the notification is not regular.

By stating that these provisions are inapplicable, the French Supreme Court settles a long-standing doctrinal and case-law debate: the information of the assigned debtor in the context of an assignment of a receivable to a securitisation fund does not fall under the regime of notification of procedural documents. It is a simple information obligation, mandatory to be sure, but not subject to the same rigorous formalities.

This distinction rests on a difference in nature between the two types of acts. A procedural document (summons, judgment, payment order, etc.) triggers time limits, opens avenues of appeal and may have immediate consequences for the parties’ rights. Its notification must therefore be surrounded by strict guarantees so that the addressee can effectively exercise the rights of the defence.

By contrast, informing the debtor of the assignment of the receivable triggers no particular time limit and does not substantially alter his legal situation: he remains debtor of the same sum, on the same terms, to a different creditor. The information obligation simply aims to enable him to know to whom he must pay and who may bring proceedings against him. It therefore does not require the same solemnities.

The French Supreme Court thus validates a pragmatic approach: once the debtor has actually been informed of the assignment and of the identity of the entity in charge of recovery, the precise arrangements for that information do not matter. Proof of this effective information may result from a body of evidence, without any need to comply with the strict rules of Article 670.

This solution has the advantage of simplicity and legal certainty for participants in the securitisation market. It prevents recovery procedures from being paralysed on purely formal grounds, even though the debtor was actually aware of the assignment. In this it joins the general philosophy of the law of civil enforcement procedures, which favours the efficiency and speed of recovery.

On the complaint of failure to respond to submissions, the French Supreme Court considers that the Court of Appeal did respond to the arguments of Mr and Mrs J. by noting that the address stated on the letters was correct and that no probative evidence made it possible to doubt their receipt. By dismissing the relevance of the identity of the signatures on the acknowledgments of receipt (since Article 670 was not applicable), the Court of Appeal did not fail to respond: it implicitly but necessarily considered that this argument was ineffective.

The Practical Consequences for Borrowers and Securitisation Funds

This judgment of 4 March 2026 is bound to set a precedent. Published in the Bulletin of the French Supreme Court, it is intended to be widely circulated and to serve as a reference for lower courts faced with similar disputes. Its practical implications deserve to be analysed for both borrowers and recovery professionals.

Debtor protection relaxed but maintained

For borrowers whose loan has been assigned to a securitisation fund, this judgment means that their scope for challenge on formal grounds is considerably reduced. It will no longer be enough to point to a minor irregularity in the notification (a single signature on two acknowledgments of receipt, the absence of a registered letter, etc.) to defeat a recovery procedure.

This does not mean, however, that debtors are deprived of all protection. The information obligation remains: the assignee must inform the debtor of the assignment and of the identity of the entity in charge of recovery. Failing that, the action for payment or property seizure would be inadmissible.

But proof of this information may now be provided by any means. A simple letter, even without acknowledgment of receipt, may suffice if other elements corroborate its actual receipt. A payment order, a summons, or even an exchange of correspondence between the debtor and the recovery entity may demonstrate that the debtor was aware of the assignment.

Debtors who wish to challenge the validity of their information will therefore have to adopt a different strategy. Instead of concentrating on purely formal arguments, they will have to show that they objectively could not have been aware of the assignment: a change of address not reported to the assignee, lost or undelivered letters, a manifest error in identifying the debtor, etc.

It also remains possible to challenge the assignment itself on the merits: absence of an enforceable instrument, dispute over the amount claimed, limitation of the receivable, prior payment, etc. But these grounds fall within the discussion of the merits of the debt and no longer of the regularity of the information procedure.

Possible defence strategies for borrowers

Despite the apparent hardening of the case law, borrowers faced with a recovery procedure by a securitisation fund still have several levers of defence which should be activated methodically.

First of all, it is essential to verify the chain of successive assignments. In the case decided in 2026, the receivable had gone through three assignments in less than seven years. Each assignment must be documented and justified. The assignee who brings legal proceedings must produce the successive assignment instruments and demonstrate that it is indeed the current holder of the receivable. A break in the chain of assignments, an incomplete or ambiguous instrument, may justify the inadmissibility of the action.

Next, the content of the notifications received should be examined carefully. Informing the debtor is not limited to announcing that an assignment has taken place: it must also state the precise identity of the assignee (name of the fund, management company) and, above all, the entity in charge of recovery. If the letters are incomplete, contradictory or imprecise on these points, the information may be held to be insufficient.

Moreover, borrowers should systematically dispute the amount claimed. Securitisation funds often buy receivables at a discount and sometimes apply excessive interest rates or penalties. An accounting expert report may reveal errors in the calculation of the outstanding capital, interest or recovery costs. The judge may then reduce the debt or schedule its payment in instalments.

Limitation of the receivable is also a classic but still effective defence. For property loans, the limitation period is five years from the first unpaid instalment that has not been regularised (Article L. 137-2 of the Consumer Code (code de la consommation)). If the assignee has been slow to act, all or part of the receivable may be time-barred. Beware, however: serving a payment order or commencing court proceedings interrupts limitation.

Finally, borrowers may rely on grounds drawn from consumer law or banking law: failure to provide the early repayment statement, absence of information on the possibility of taking out borrower insurance with the provider of their choice, unfair terms in the loan contract, etc. These grounds do not challenge the assignment itself, but may reduce the amount of the debt or give rise to compensatory damages.

An effective defence strategy therefore requires a fine legal analysis of the file, if possible with the assistance of a lawyer specialised in banking law and over-indebtedness law. It is no longer a matter of raising purely formal grounds, but of challenging the substance of the case and, where appropriate, negotiating payment in instalments or a partial debt write-off.

Best practices for funds and recovery companies

On the side of securitisation funds and recovery companies, this judgment of 4 March 2026 brings welcome legal certainty, but it must not lead to neglecting the information obligations towards debtors.

First recommendation: systematically document the information given to the debtor. Even though the law allows information “by any means”, it is prudent to multiply the communication channels (ordinary letter, registered letter, email, text message) and to keep proof of each attempt at contact. This redundancy will create a body of evidence that is hard to challenge in the event of a dispute.

Second recommendation: ensure the clarity and completeness of the information delivered. The letter sent to the debtor must state: the date and amount of the assignment, the precise identity of the assignee fund, the management company that administers it, and the entity in charge of recovery with its full contact details. Any imprecision or omission may be exploited by the debtor to challenge the validity of the information.

Third recommendation: adapt the message to the debtor’s situation. People in financial difficulty are often vulnerable and poorly informed about their rights. A letter written in incomprehensible legal language risks being misinterpreted or ignored. It is preferable to adopt an educational tone, explain the consequences of the assignment in simple terms, and invite the debtor to get in touch to discuss possible amicable solutions.

Fourth recommendation: scrupulously respect the ethical rules of amicable and judicial recovery. The Consumer Code and the Code of Civil Enforcement Procedures prohibit aggressive practices, threats, repeated calls at unreasonable hours, or letters containing misleading statements. A recovery company guilty of such practices would be exposed to civil and criminal sanctions, regardless of the validity of the receivable pursued.

Fifth recommendation: train teams in the specificities of consumer law and over-indebtedness law. Many debtors are eligible for an over-indebtedness procedure before the individuals’ over-indebtedness commission or for a personal recovery procedure before the judge. In these situations, judicial recovery is suspended and proceedings may be declared inadmissible. It is therefore essential to detect these situations upstream and to direct the debtor towards the appropriate support schemes.

Conclusion

The judgment handed down by the French Supreme Court on 4 March 2026 marks an important step in clarifying the legal regime applicable to the information of the assigned debtor in securitisation transactions. By stating that this information may be given “by any means” and that Article 670 of the Code of Civil Procedure does not apply, the highest court adopts a pragmatic and liberal approach that favours the fluidity of the credit market and the securing of recovery operations.

That said, this decision must not be read as a green light for cavalier practices. The information obligation remains mandatory and securitisation funds have every interest in scrupulously documenting their steps to avoid challenges. As for borrowers in difficulty, they retain effective means of defence, provided they shift the debate from the ground of form to that of substance: challenging the amount of the debt, limitation, recourse to over-indebtedness procedures.

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