A number of changes regarding the Uniform Commercial Code Article 9 have gone into effect in the vast majority of U.S. states.
First proposed in 2010, the changes have been adopted by 37 states and the District of Columbia. They were crafted to clarify vagaries existing in UCC mandates caused by a lack of uniformity in the language of various state laws. NACM’s Secured Transaction Services Directory Gregory Powelson noted the changes should provide better protection to creditors who choose to use UCC filings to become secured while also streamlining the process of perfecting a UCC-1 filing.
Amendments to UCC-9 include the following:
- Debtor’s name: Amendments provide greater guidance regarding the debtor’s name that must be used on a financing statement. The amendment on that topic offers two alternatives regarding naming: either providing the name on the debtor’s unexpired driver’s license or, as noted in the previous UCC mandate, using the debtor’s “individual,” birth-given name.
- After Acquired Property: Perfected security interests in after-acquired property arising within four months after a debtor relocates or assumes collateral will remain perfected as long as a filing is made in the debtor’s new jurisdiction within the four months.
- Information Statements: Secured parties now have the right to file an “information statement” if they believe a filing (termination statement, etc.) has been wrongfully submitted. This notifies third parties of a dispute.
- Technical Amendments: Regarding financing statements, some information will no longer be required. This includes type of organization, jurisdiction of organization and organizational identification number of the debtor.
Powelson noted most state will continue to accept the old financing statements thru July, after that only the new financings statements will be accepted and oddly Wyoming will begin to cycle their financing statement on 10 years renewals vs. the otherwise standard 5 years. Three holdouts – Alabama, Oklahoma and Vermont – will not be adopting the Article 9 amendments in 2013, according to STS. Adoption remains pending in 10 more (AL, AZ, CA, ME, MA, MO, NJ, NY, PA, SC).
-Brian Shappell, CBA, CICP, NACM staff writer
More information on NACM’s Secured Transaction Services, including Mechanic’s Lien and Bonds as well as UCC filing offerings, can be obtained by clicking here.