The 2014 legislative session is over or winding down in most states. Unlike the past few years, there were relatively few bills introduced this session that affect UCC Article 9. This article provides an update on the most significant legislation of interest to those who follow UCC Article 9 developments.

2010 Amendments to UCC Article 9

Most states enacted the 2010 Amendments to UCC Article 9 (the “Amendments”) prior to the uniform effective date of July 1, 2013. However, a handful of states missed the enactment goal and had to reintroduce the legislation this year. In addition, a number of other bills with an Article 9 impact were introduced in various states during the 2014 legislative session.

By the end of September 2013, only Alabama, Arizona, California, New York, Oklahoma, Vermont, and the U.S. Virgin Islands had not passed the legislation. Most of these jurisdictions addressed the legislation this year.

Alabama: The governor signed Senate Bill 28 on April 9, 2012, to enact the Amendments. The new law takes effect on July 1, 2014. The Alabama legislation followed the majority rule for sufficiency of individual debtor names. Under the new Alabama version of § 9-503(a)(4), if the debtor is an individual, the financing statement is sufficient only if it provides the name of the debtor indicated on the person’s driver’s license or non-driver identification card. The legislation included the form text in the new version of § 9-521, so the filing office will accept the new forms when the law takes effect. The transition period was adjusted due to the late effective date and runs through June 30, 2019.

Arizona: The legislature passed Senate Bill 1046, which included an emergency clause. As a result, the Amendments took effect immediately after the governor signed the bill on April 22, 2014. As in Alabama, the new Arizona version of § 9-503(a)(4) adopts the Alternative A “Only If” approach for individual debtor name sufficiency. The new law also incorporates by reference the 4/20/11 revision forms set forth in the official text of the Amendments. The transition period actually runs more than five years. The non-uniform transition rules provide that the transition period ends on August 31, 2019.

California: The legislature passed Assembly Bill 502 to enact the Amendments last September and the governor signed it on October 4, 2013. However, the new law does not take effect until July 1, 2014. The legislation contained a significant non-uniform provision. It adopts neither legislative Alternative A nor B for individual debtor name sufficiency. Instead, the new version of § 9-503(a)(4) provides that the financing statement will be sufficient if it provides “the individual name of the debtor” or “the surname and first personal name” of the debtor. Otherwise, the legislation adopted the new forms and provides for a four-year transition period that ends on June 30, 2018.

New York: The legislature did not introduce a bill to enact the Amendments until June 2013, far too late for adoption by the uniform effective date. Therefore, it carried over into 2014. Senate Bill 5901 also includes Revised Articles 1 and 7, plus significant amendments to Articles 3 and 4. The bill was assigned to committee on January 8, 2014, and still had not been scheduled for a hearing as of May 27, 2014.  While the Senate bill seems stalled, the Assembly introduced similar legislation as Assembly Bill 9933 on May 30, 2014.  The new bill includes Revised Articles 1 and 7, but omits the amendments to Articles 3 and 4.  It also omitted transition rules for the amendments to UCC Article 9.  The bill was promptly assigned to the Assembly Judiciary Committee, where it will likely be amended to add the transition rules and some other omitted provisions.

Oklahoma: Legislative efforts to enact the 2010 Amendments ran into trouble in 2014. Although Senate Bill 371 passed the Senate, it failed to make it out of committee by the House deadline. Consequently, Oklahoma will have to reintroduce the legislation in 2015.

Puerto Rico: Revised Article 9 with the Amendments took effect in January 2013. The legislation, however, included a number of drafting errors and conflicts. One of those conflicts involved the effective period for financing statements. As originally enacted, § 9-515(a) provided that a filed financing statement was effective for 10 years. However, that was a drafting error. The legislature intended that financing statements would be effective for the uniform five-year period. To correct the error, the legislature enacted an amendment this year that changed the effective period in § 9-515(a) to five years. That bill took effect immediately on January 16, 2014. As a result, any financing statement filed before that date is effective for 10 years and anything filed on or after that date is effective for only five years. Secured parties should ensure their lapse date tracking systems are adjusted accordingly.

Vermont:  The governor signed House Bill 483 to enact the Amendments on May 28, 2014.  The new law takes effect on July 1, 2014. The new law adopts the Alternative A “Only If” approach for individual debtor name sufficiency in § 9-503(a)(4), but limits the sufficient source of the name to the driver’s license. The new law also provides the images similar in form and format to the 4/20/11 revision forms in § 9-521, but they are not identical. The five-year transition period will end on June 30, 2019.

U.S. Virgin Islands: The 2010 Amendments legislation still had not been introduced as of May 27, 2014. However, a bill is expected to be introduced sometime later this year.

Fraudulent UCC Filing Legislation & Rules

The filing of UCC financing statements with the intent to harass, intimidate, or defraud the named debtor is an ongoing problem for filing offices. These fraudulent UCC records tend to have an impact out of proportion to the relatively small number of filings. However, the targets of fraudulent UCC records are often judges, IRS agents, prosecutors and others with significant political influence. As a result, several states introduced legislation or adopted rules to address the issue.

Maryland: Senate Bill 404, signed by the governor on April 8, 2014, requires the State Department of Assessments and Taxation UCC filing office to send a notice to the debtor following the filing of a financing statement where both the debtor and secured party are individuals.

Missouri: Senate Bill 724 and House Bill 1412 are both currently pending transmission to the governor. These bills will resolve a conflict between the UCC administrative rules and UCC Article 9. The rules provide the filing office with several additional reasons for rejection not contained in § 9-516(b) and also allow the filing office to terminate a financing statement it later determines was fraudulent. The only problem with the existing rules is that Article 9 grants the filing office no authority to take such actions and, in fact, specifically prohibits them. If enacted, the pending bills will grant the requisite authority to the filing office.

Missouri: House Bill 2214, introduced on March 31, 2014, also addresses the issue of fraudulent UCC records. A unique aspect of this bill is that it places a duty on title companies to file a notice of false or fraudulent document if it discovers a UCC record that it determines was materially false or fraudulent. The bill is currently pending in the House.

New Jersey: Assembly Bill 2481, which is pending in the legislature, would grant the filing office authorization to terminate a fraudulent UCC record under certain conditions following the filing of an affidavit by the debtor. The bill also includes administrative procedures for reinstatement by the secured party. In addition, the Department of Revenue and Enterprise Services, which manages the UCC filing office, proposed changes to the UCC rules to address fraudulent UCC records. The proposed rules would allow the filing office to remove a filed UCC record from the index if it determines that the record contains “confusing, conflicting or contradictory matter that gives rise to uncertainty, ambiguity, or lack of clarity as to information in the record.” Proposed rule 17:33-5.2(b) directly conflicts with the provision in Article 9 that prohibits the filing office from removing a filed record from the index until after the record lapses. The rule is not yet final and may change following the comment period.

Other Legislation and Rules of Interest

California: Assembly Bill 1858 is currently pending to make changes to the Article 9 Amendments enacted last year. The bill would amend § 9-503(a)(4) to adopt the legislative Alternative A for sufficiency of individual debtor names to restore the uniform text make the California law consistent with the majority rule. The bill passed the Assembly and was pending in the Senate as of May 27, 2014. If enacted, this bill will not take effect until at least January 1, 2015. Consequently, the 2010 Amendments will take effect in California on July 1, 2014, with the non-uniform safe harbor.

Missouri: House Bill 1376 passed both chambers and awaits transmission to the governor. If enacted, this bill will add “nondriver identification card” to the § 9-503(a)(4) as an additional sufficient source of the individual debtor name. The bill also fixes some other minor omissions and oversights in original 2010 Amendments law.

All pending bills are, of course, subject to change throughout the legislative process. CSC will continue to monitor Article 9 and related legislation. Updates are regularly posted to

If you have questions or need additional information on legislation, please contact Paul Hodnefield, Associate General Counsel, at (800) 927-9801, ext. 62375, or by email at

UCC Article 9 Legislative Update