UCC news
12/15/2011 9:13:24 AM
North Dakota Eliminates Requirement on UCC Financing Statement
Effective 1/1/2012 North Dakota eliminates requirement that the UCC financing statement must include debtor's SS# or Fed. Tax ID number.
11/23/2011 1:24:09 PM
Seven States Enact 2010 Amendments to UCC Article 9
According to the Uniform Law Commission, seven states have now enacted the 2010 Amendments to the Uniform Commercial Code Article 9.
Indiana, Minnesota, Nebraska, Nevada, North Dakota and Texas have all selected the individual debtor name Alternative A, while Washington picked Alternative B.
All will be effective July 1, 2013. It is expected that many more states will enact the amendments in 2012.
10/10/2011 4:05:13 PM
Australian PPS Act and PPS Register Scheduled to Commence in Early 2012
The Australian PPS Act and PPS Register are scheduled to commence from the registration commencement time, which will be in early 2012.
Attorney General, Robert McClelland will make a determination under the Personal Property Securities legislation that will set the actual date for the PPS register commencement.
(Source: Personal Properties Security Register)
5/2/2011 11:55:13 AM
Four States Enact 2010 Amendments to UCC Article 9
North Dakota, Nebraska, Indiana and Washington are the first states to enact the 2010 Amendments. The uniform effective date is July 1, 2013.
The 2010 Amendments provide greater guidance as to the name of the debtor to be provided on a financing statement. This guidance falls under 9-503(a), the debtor name.
1) For Registered Organizations: The name will be what is found on the public organic record(s).
2) For Individuals: The state will have to choose between...
Alternative A: the name of an individual debtor, as it appears on the most recent unexpired driver's license.
Alternative B: Provides 3 ways for the name of individual debtor:
• as under current law - using the individual name of the debtor
• debtor's last name (surname) and first name
• unexpired driver's license
North Dakota, Nebraska, and Indiana chose Alternative A.
Washington chose Alternative B.
NCS will closely monitor the enactment of these amendments by each state and keep you informed as more states introduce the 2010 Amendments to Article 9.
4/13/2011 3:36:02 PM
North Dakota First to Enact 2010 Amendments to UCC Article 9
The first state to enact the 2010 Amendments to UCC Article 9 is North Dakota. House Bill 1137 was signed by the governor on April 4, 2011. The new law takes effect on July 1, 2013 - the uniform effective date provided in the 2010 Amendments.
Alternative A was enacted for North Dakota's version of Section 9-503(a)(4). Once the new law takes effect, if the debtor is an individual that has been issued a driver's license or identity card by the State of North Dakota, the financing statement must provide the name indicated on that driver's license or identity card.
2/4/2011 3:32:00 PM
States Begin to Implement 2010 Amendments to UCC Article 9
Six states have introduced legislation to implement the 2010 Amendments to UCC Article 9. The uniform effective date is July 1, 2013. The six states are Connecticut, Indiana, Nebraska, North Dakota, Oklahoma and Washington.
NCS will closely monitor the enactment of these amendments by each state and keep you informed as more states introduce the 2010 Amendments to Article 9.
9/16/2010 3:39:25 PM
Critical Changes to UCC Article 9
Critical changes have been approved by the Uniform Law Commission (ULC) to be enacted on July 1, 2013. According to the ULC: "The 2010 Amendments to UCC Article 9 modify the existing statute to respond to filing issues and address other matters that have arisen in practice following a decade of experience with the 1998 version of UCC Article 9. Of most importance, the 2010 Amendments provide greater guidance as to the name of an individual debtor to be provided on a financing statement.” This guidance falls under 9-503(a), the debtor name. A registered organization's name will be what is found on the public organic record(s).
An individual name will be the name found on the individual’s unexpired driver's license. If no driver’s license is available, then the individuals name will be the surname and first name.
Be assured that NCS will closely monitor the enactment of these amendments by each state and will keep you informed.
6/4/2010 4:22:42 PM
Australia extends Personal Property Reform Bill until May 2011
In Australia, Personal Property security reform has been a policy of
issue for many years.
Following the lead of the United States, Canada
and New Zealand, the Commonwealth Government of Australia released the
Personal Properties Securities Bill in 2008. The reform Bill is proposed
to establish national comprehensive rules governing security interests
in personal property. The Bill intends to remove the current
limitations on the use of personal property as a security for loans. It
will also develop a single national online register of personal property
security interests, helping secured creditors determine priority.
In
November 2008, the Bill was referred to the Standing Committee on Legal
and Constitutional Affairs. On March 19, 2009, the Standing Committee
extended the commencement of Bill from May 2010 to May 2011 in order to
implement the Standing Committee's recommendations. It is possible that
further amendments will be made to the Bill before it is debated in
Parliament. In all likelihood the Bill will be passed providing a huge
benefit to secure personal property in Australia.
5/10/2010 11:54:11 AM
Puerto Rico Gets Assistance with UCC Processing
The Puerto Rico Department of State has hired INFOMAX Corporation to assist in the processing of UCC information.
Most of the backlog of thousands of documents since June 2009 have been processed. They are currently working on filings for April and May 2010.
Documents will be returned as soon as they are posted. Requests for information (search requests) still reflect a through date of June 30, 2009.
11/9/2009 2:34:00 PM
Fulton County Clerk of Superior Court Implements a New and Tested Imaging System
Beginning January 1, 2010, the Office of Fulton County Clerk of Superior Court will return all recorded ORIGINAL UCC filings for your records and safe keeping. The office will then only require one copy of the UCC filing for recording. In addition previously recorded, 2009 original UCC filings, can be easily and quickly returned to you by submitting the following information.
- File number
- Mailing address
- Debtor and/or secured party
After 2009 the originals are then archived, taking weeks for the document to be retrieved.
For more information, please contact Office of the Clerk of Superior Court, Fulton County,
Recording Division,
136 Pryor Street
Atlanta, GA 30303
Attn: Eric Styles
11/2/2009 1:00:00 PM
Minnesota UCC Update Sept. 2009
The Minnesota Secretary of State is in the process of developing a new on-line application for filing Uniform Commercial Code(UCC) documents that is expected to be ready in 2010. They are currently operating under the new online application. It is their intention to discontinue the acceptance of filings against all pre-existing liens originally recorded with Minnesota counties that have not properly transitioned to the central system via 'in-lieu of filing' under the provisions of UCC Revised Article 9, MN Statutes Chapter 336, Article 9, Part 7.
10/19/2009 1:55:00 PM
Oklahoma County Clerk's Office UCC Update
Effective October 19, 2009, the Oklahoma County Clerk's Office is implementing new computer applications for the Register of Deed (ROD) and Uniform Commercial Code (UCC) filing offices. The new technology will offer the ability to file electronically along with new search features. Oklahoma's County Clerk Carolynn Caudill's goal "is to provide you with the most user-friendly, up-to-date technology that makes your job filing documents and searching county records much easier."
9/16/2009 3:24:00 PM
Connecticut Secretary of State Offers Online Filing
Effective September 2009 the Connecticut Secretary of State now offers online filing for ONLY original UCC Financing Statements. Along with this enhancement comes the doubling of filing fees. NCS UCC Services Group has partnered with the Connecticut Secretary of State as an online service provider.
9/16/2009 3:12:00 PM
Puerto Rico UCC Update
The Commonwealth of Puerto Rico Department of State is undergoing financial difficulties that have resulted in the reduction of their workforce. During this restructuring the filing of UCC documents has been delayed. There have been no UCC documents recorded since July 2009. The office continues to accept mailed documents by date stamped in order of receipt.
9/15/2009 3:21:00 PM
Georgia UCC Update 09/15/09
Effective September 15, 2009, The Georgia Cooperative Authority has begun transitioning to online filing. Currently this new service is only offered through three counties – Fayette, Barrow and Coweta with NCS UCC Services Group as a pilot partner.
Under the current system, a secured party need only file in one county to receive statewide notification of his lien position. This continues to be true for original UCC filings, but any UCC Amendment filings must be recorded in the county where the original filing was made. Historically, prior to 1995, it was necessary to file in all 159 Georgia counties to receive statewide notification. The central index provides secured parties with greater protection while saving them both time and money.
12/17/2008 1:08:00 PM
Accounts Receivable: The Bank of Last Resort
Credit Today conducted a roundtable discussion where trade credit leaders met to discuss the current credit crisis. The group made some stark predictions about the economy, and the key findings are now available.
Click here to read the full release.
11/12/2008 1:05:00 PM
Surviving the Credit Crisis - Managing Receivables
The latest white paper from The Credit Research Foundation, Managing Receivables in the Midst of Today's Economic Environment, focuses on the potential impact it will have on your business.
After reading this white paper we encourage you to contact NCS to review your current credit procedures to make sure you are in the best position to get paid. For 38 years NCS has been the expert in providing solutions to Secure Your Tomorrow.
Click here to read the white paper.
This article is being reproduced with permission from The Credit Research Foundation.
10/10/2008 12:59:00 PM
Surviving the Credit Crisis
After reading this white paper, Lessons for Businesses to Learn from Today's Credit Crisis, we encourage you to contact NCS to review your current credit procedures to make sure you are in the best position to get paid. For 38 years NCS has been the expert in providing solutions to Secure Your Tomorrow.
Click here to read the white paper.
This article is being reproduced with permission from the Credit Research Foundation.
9/9/2008 12:54:00 PM
Ohio UCC Update Effective 9/1/08
On September 1, 2008, House Bill 46 went into effect, giving the Secretary of State the authority to reject any document containing a Social Security number or federal tax identification number.
It is requested to remove all personal information from documents prior to filing them. Visit the Ohio House of Representatives' website at http://www.sos.ky.gov/business/ucc for a complete copy of House Bill 46.
8/15/2008 12:51:00 PM
East Baton Rouge UCC Procedure Change
Recording Procedures Change for East Baton Rouge, LA
As of July 14, 2008, each document mailed to East Baton Rouge Parish Clerk of Court must include a completed copy of the "Recording Instruction Sheet." This change is in conjuction with the live activation of the new digital imaging system. All information on the Recording Instruction Sheet must be completed. Pay special attention to the Recording Instructions header where you must check the category of records into which you wish your document recorded. Images are viewable through the subscription based "Online Access Services."
Visit the East Baton Rouge Clerk of Court website at http://www.sos.ky.gov/business/ucc for more information. If you have any questions, contact NCS at (800) 826-5256 or SecureYourTomorrow@ncscredit.com.
8/15/2008 12:49:00 PM
Nebraska UCC Law Revised
Nebraska UCC Law Amendment will now go into effect September 2009, not July 2008.
Approved by Governor Heineman on March 19, 2008, law LB 851 revises UCC 9-506(b). Now to go in effect September 2009, the law amends that if a debtor is an individual correctly stating only the last name on the original financing statement is sufficient. First and middle names are now meaningless. This now puts a huge burden on UCC searchers. Searchers will have to review every financing statement that provides the same last name. "The intent of the law is to provide secured parties with greater certainty that errors or omissions on an individual's debtor's first or middle name (initial) would not make the financing statement seriously misleading."
For more information visit Nebraska's legislative site at http://www.unicam.state.ne.us.
7/30/2008 12:45:00 PM
Kentucky UCC Acknowledgement Procedure to Change
Effective August 1, 2008, Kentucky changes UCC acknowledgement procedure.
To help reduce costs, the Kentucky Secretary of State Office is modifying the UCC acknowledgement process. Currently, customers who complete Box B on the UCC Financing Statement receive a mailed copy of the original UCC filing. Since a redacted version of all filings is available online at http://www.sos.ky.gov/business/ucc/online, customers now completing Box B will be mailed a postcard acknowledgement as receipt of the filing. Customers are encouraged to view the filing online. Beginning August 1, original documents will no longer be returned.
The acknowledgement postcard will include:
• A visual copy of the first page of the record image (redacted for security)
• The web address where the filing can be viewed online
• The file date and time; original file date and time and filing status
For more information click here. If you have any questions, please contact NCS at (800) 826-5256 or SecureYourTomorrow@ncscredit.com.
7/16/2008 12:42:00 PM
Attention! Utah Changes Hours of Operation
Please be advised that beginning Monday, August 4, 2008, the Working 4 Utah initiative will be implemented. This program will extend state government service hours from 7 a.m. to 6 p.m., Monday through Thursday, with offices closed on Fridays. Governor Jon Huntsman states the goal is to "conserve energy, save money, improve our air quality, and enhance customer service."
New hours of operation as of Monday, August 4, 2008:
Monday - Thursday, 7 a.m. to 6 p.m.
Closed on Fridays
UCC filings and searches may be submitted online at any time 24/7/365.
For more information click here. If you have any questions about this information, please contact NCS at (800) 826-5256 or SecureYourTomorrow@ncscredit.com.
7/1/2008 12:32:00 PM
Security for a Softening Economy
It happens everyday. Credit Managers face the difficult decisions of extending credit lines, reviewing financial risk, and protecting their accounts receivable. To make these decisions even more difficult add to the mix the reports of an uncertain economy.
In April 2008 a survey of The Federal Reserve's Senior Loan Officers showed that banks are preparing to weather the storm. The survey showed 55 percent of banks had tightened lending standards on corporate loans in the last three months, up from 30 percent in January. At best, our economy is softening. Like it or not, this means your customers will be looking to you for discounts or extended terms. What do you do? The answer is to do the same things the banks do. Secure collateral against the credit lines that you extend. Banks have always taken advantage of this principle. Why shouldn't you do the same?
Trade creditors have different options for securing collateral against credit lines. If the goods are being permanently affixed to a building, take advantage of the mechanic's lien laws. If not, record a UCC Filing to secure your inventory, equipment or accounts receivable.
When selling materials, providing labor or services that permanently improve real estate, the mechanic's lien filing process is the best method to get the needed leverage to ensure payment. The theory is very simple. You have improved the property; therefore the owner should not retain the improved benefit until it is paid. Legally, you can secure yourself against the piece of property to the extent you have improved that property. One issue that frequently arises is that you are asked to extend credit lines to customers that do not have the financial strength to merit that credit. The lien process gives you an option to sell on open terms.
Not everyone is eligible to file mechani's liens. It is a very defined right. Your materials must be permanently affixed to a piece of property, or your service, or labor must contribute to the improvement of that property. If your business falls within the realm of having lien rights, you must be sure to follow the required lien laws in the state where the property is being improved. In many states this means you must react early in the process. The lien laws in many states involve steps that must be taken shortly after first furnishing materials, service, or labor to the jobsite. If you do not fulfill these requirements in the times frames outlined, you may be jeopardizing your ability to take collateral against the piece of property you have improved.
UCC filings bring another opportunity for trade creditors to take security against the credit lines they extend. The good news is that UCC filings are not a defined right; businesses can take obtain security by filing a UCC Financing Statement. Taking a security interest is consensual. Your customer must grant you the right to take security in their collateral by signing a security agreement. Unlike attaching to real property under the Mechanic Lien Laws, Article 9 of the Uniform Commercial Code allows taking security in your customer's assets, which can be inventory, equipment, proceeds, accounts receivable, general intangibles, or other collateral classifications. Properly filing the UCC document makes you a secured creditor and can place you at the top of the claims pyramid.
Unfortunately there is not a crystal ball to guide you through the maze of credit decisions. However, using the tools that are available can be a great start. Do not leave yourself unprotected by not taking the proper steps. The effect of leav
5/9/2008 12:31:00 PM
Washington State - UCC Filing Fees to Increase
Please be advised that effective June 12, 2008, Fees for Washington State's UCC services will increase.
For more information visit the Washington Secretary of State's website at http://www.secstate.wa.gov/.
5/7/2008 12:28:00 PM
Tennessee Law Amendment Now in Effect
On March 5 Senate Bill 3732 amended Tennessee UCC 9-503(a). The new law took effect May 1, 2008. The bill provides that an individual name is sufficient for the UCC Financing Statement if the name is shown on one of these six documents: driver's license, state ID card, birth certificate, passport, social security card and military ID card. Again, a huge burden has been put on the searching process. It is vital that the names provided on every one of these government-issued documents be searched to reduce risk of missing an effective record.
5/1/2008 12:19:00 PM
Strategic Ways to Incorporate Security Agreements
Taking a secured interest in your customers' collateral brings numerous benefits. Learn what considerations should be made to approach customers for them to extend these benefits to you.
When you are presenting Security Agreements to your customer, there are some issues that must be taken into consideration. Are you asking for security from a new customer or an existing one? They are two very different situations and must be addressed accordingly. If it is a new customer, how have you arrived at the decision to request security? Is it because the credit line exceeds an established threshold? Does your bank place a greater value on secured accounts versus unsecured accounts? Both are good reasons to request security with which your customer would have a difficult time arguing. If it's an existing customer, are they past due or over their credit line? With existing customers requesting security is a little more difficult. You really need to think about how you can make it palatable for the customer to sign the security agreement. Can you trade an increase in their credit line for security? Do you use security as a tool to drive the debtor back to within terms?
Some of the other reasons creditors would request a security agreement:
• The debtor has requested a particularly large order which is out of their norm
• The debtor has a declining financial situation
• Liens have been filed on the debtor
• Judgements have been awarded against the debtor
• The debtor has had a change of ownership or structure
• The industry has had a downturn in business
• The creditor wishes to sell more and drive market share using a larger credit line, which requires security
• The debtor needs a favor
Some important points to understand when presenting security agreements to your customer:
• The security interest will cost your customer nothing
• Your secured interest will rank behind the debtors bank, so you won’t impact their borrowing ability
• The security interest only will become an issue if your customer defaults. If they pay their bills it will be irrelevant.
Perhaps a way to present this would be to offer two options:
• Standard terms or extended terms. That way the customer can choose which way they want the account to be handled. Or, call it your Extended Terms Program, which they qualify for. Perhaps it includes a price freeze for a 12-month period. All they need to do is sign the Program Agreement (which contains the security verbiage.)
It's interesting to see how the culture affects the behavior.When you purchase a car, you fully expect the parade of paperwork that you are required to sign, which includes a secured interest in the car. In the business world it's a little different. The way that the security agreement is presented will influence how the customer views it. Presenting the security agreement in a manner that it's just a generally accepted business practice will result in more agreements being signed than presenting it in an apologetic manner that insinuates you feel you are infringing on their business culture.
Taking a secured interest in your customer's collateral brings numerous benefits. Consideration has to be given to how to approach customers for them to extend these benefits to you. The answer is always "no" if we don't ask the question.
4/18/2008 11:07:00 AM
Nebraska UCC Law Revised
Nebraska UCC Law Amendment goes into effect July, 2008
Approved by Governor Heineman on March 19, 2008, law LB 851 revises UCC 9-506(b). Effective July, 2008, the law amends that if a debtor is an individual correctly stating only the last name on the original financing statement is sufficient. First and middle names are now meaningless. This now puts a huge burden on UCC searchers. Searchers will have to review every financing statement that provides the same last name. "The intent of the law is to provide secured parties with greater certainty that errors or omissions on an individual's debtor's first or middle name (initial) would not make the financing statement seriously misleading."
For more information visit Nebraska's legislative site at http://www.unicam.state.ne.us.2/1/2008 10:00:00 AM
Important UCC Law Change
Texas continues its tradition of pioneering changes to the UCC law.
9.503 NAME OF DEBTOR AND SECURED PARTY. (a) A financing statement sufficiently provides the name of the debtor: (1) if the debtor is a registered organization, only if the financing statement provides the name of the debtor indicated on the debtor's formation documents that are filed of public record in the debtor's jurisdiction of organization to create the registered organization and that show the debtor to have been organized, including any amendments to those documents for the express purpose of amending the debtor's name.
This means that the debtor's legal name, if a registered entity, must be obtained from the formation documents (Articles of Incorporation), not the state's public record (Corporate Certificate).
Texas has always been the pioneer for changes to the UCC law. We anticipate that the other states will enact similar laws in the future. In anticipation of this, we are advising our clients to always request the Articles of Incorporation (and debtor name amendments) to verify the name of a registered organization, instead of only doing the Corporate Certificate.
3/19/2007 9:34:00 AM
How to Secure Your Accounts Receivable and Keep Your Customers
It happens every day. Credit managers face a conundrum: how to protect your accounts receivable without alienating your customers. Whether dealing with commercial sales or protracted construction projects, the laws are specific about the steps required to ensure payment...but credit managers often fear sending the wrong message to their customers by taking those very steps. After all, won't a general contractor interpret a notice sent to the owner as an insinuation of a possible lack of pay? Won't a customer interpret the filing of a UCC as a comment upon their creditworthiness?
The simple answer is this: They shouldn't. The real world answer is this: They might, if you don't manage the process carefully -- and that reaction may be amplified by established customers.
All construction project contracting should begin with a notice to owner. The purpose of a notice is two-fold. First, it is statutorily required in most states, as the first step in securing your lien rights. Second, it is a way to enlist the owner's help to ensure your payment. In effect, you're announcing that you're here, you're in the process, and you expect to get paid. The fear is that your customer will take it personally. While you should be careful in wording a notice -- in most states the verbiage required is very particular -- you can still include language that softens the impact of a notice without invalidating your future rights. It's a good idea for your notice to include language such as “No lien has been filed against the property. This is merely a notice of lien rights. This notice should not reflect upon the creditworthiness of any party, nor does it indicate any expected problems in the payment of any invoices."
In a commercial sales environment, to one degree or another, you are always at risk of your customer defaulting. Should that happen before you are paid for the goods or services you provided, you will be placed into a pyramid of payees in which the secured creditors at the top of the pyramid get paid first. How do you secure your position near the top of that pyramid?
The Uniform Commercial Code allows you to notify other creditors about a debtor's assets used as collateral, by filing a public notice. Filing the proper UCC documents makes you a secured creditor, and places you near the top of the claims pyramid. Filing a UCC puts you in the best possible position to get paid.
A UCC filing does not imply anything about your customer's ability or inclination to pay. Rather, it is an inexpensive, simple and effective way to protect your accounts receivable in the event of a customer default. In other words, it will not affect your customer in any way, and therefore will not be viewed negatively.
Choose the method of softening that you wish, but don't let the fear of customer reaction cause you to leave yourself unprotected by not taking the proper steps. The effect of leaving your accounts receivable unprotected can be disastrous. The effect of securing your accounts receivable is peace of mind.
