UCC 101: THE BASICS OF UCC SEARCHING AND FILING
Uniform Commercial Code (UCC) filing, searching and monitoring can be complicated between debtor name variation, search logic differences, and various filing procedures. But filing, searching and monitoring properly can ensure your security interests remain perfected. Getting and staying organized, paying attention to detail and keeping close track of the changes that may impact your filing position can be easy with the help of a few best practices.LEARN MORE
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Intended for lenders, this hour-long webinar will provide valuable guidance to loan clerks, loan processors, commercial loan officers, and others responsible for the day-to-day management of UCC portfolios (i.e. UCC search and filing).
Join Russ Lash of CSC to learn:
Debtor name ins-and-outs
Common UCC pitfalls
Hints for better UCC-1 and UCC-3 forms
Easier options for successful debtor tracking
Disclaimer: Please be advised that this recorded webinar has been edited from its original format, which may have included a product demo. To set up a live demo or to request more information, please complete the form to the right. Or if you are currently not on CSC Global, there is a link to the website in the description of this video. Thank you.
Tiffany: Hello, everyone, and welcome to today's webinar, "UCC 101: The Basics of UCC Searching and Filing." My name is Tiffany Van Beverhoudt, and I will be your moderator.
Joining us today is Russ Lash. Russ is a financial account manager at CSC. He is responsible for building relationships with customers. And since joining CSC in 2010, Russ has improved the customer experience by shortening workflow turnaround times and decreasing processing times, including improving Uniform Commercial Code delivery times by 60%. And with that, let's welcome Russ.
Russ: Thanks, Tiffany, for the introduction. Welcome, everyone. Before we explore the UCC content, some facts about CSC. We are the business behind business, helping our customers for 122 years. We have a global presence. Picture to the right is our headquarters in Wilmington, Delaware. More than 60 years serving the financial industry. More than 6 million UCC transactions processed annually. More than 9 million UCC transactions monitored. And we provide solutions to more than 3,000 financial customers. CSC is the largest U.S.-owned provider of lien-related services, like the UCC, registered agent, entity and litigation management, and also our digital brand services.
Today's agenda: some questions to ask yourself, UCC searching, UCC filing, UCC monitoring, arming yourself with our CSC resources, and I'll walk you through the CSCFinancialOnline demo, and, lastly, questions and answers.
Questions to ask yourself. Important questions: Are you following searching and filing best practices? Also, are you filing against the right debtor names every time? And are you monitoring your portfolio for changes that may affect your lien position?
Next up is UCC searching. Review: Searching Best Practices. On the left, the searching subject, individuals and entities. On individuals, the starting point for every UCC search conducted on individual is the driver's license. On registered organizations, you want to use the public organic record. On collateral administered by a decedent's personal representative, you want to search the name of the decedent. And on collateral held in a trust that is not a registered organization, you want to search on the name put forth in the trust documents. If there is no name, you want to search on the settlor. Always include name variations for due diligence purposes. I will show you in the CSCFinancialOnline demo why this is crucial.
Next up is UCC filing. UCC Filing: Getting the Debtor Name Right. It is important to understand the impacts of the 2010 Amendments and follow the best practices for filing against individuals and registered organizations.
Filing against the individual debtor name. Only if rule, this means that the debtor name must be exactly what appears on the individual driver's license. This is also sometimes called Alternative A. Because the name must be exact on the license, it is very strict for the filer. If the license is expired or not issued by filing state, you want to default to safe harbor. Safe harbor rule, name can be what appears on the driver's license, but other names may work as well. This is also sometimes called Alternative B, and it's more forgiving for the filer because of the name leniency on the license.
As you can see from this map, an overwhelming majority of states are only if Alternative A. Just a handful of the states are safe harbor Alternative B.
To review: Corporate Debtor Name Best Practices. On the left, subjects are corporations, LLCs, and other entities. So these teal boxes will show these different entities, corporations, or LLCs, and what the best practice is.
Corporations or LLCs, you want to verify using the public organic record as in formation documents. Government charter entity, like a farm credit bank, you want to obtain the charter document. Business trusts, say in Massachusetts, you want to retrieve the record filed with the state under the state law. And then, you know, any kind of entity created by legislation, like Fannie Mae, find a statute that created the entity.
Name on UCC financing statement must match the articles of incorporation. In this court case, Alvo Grain and Feed, Inc., the articles of incorporation list Alvo Grain and Feed, Inc. And notice "and" is spelled out. The debtor name on the UCC financing statement showed Alvo Grain & Feed, Inc., "and" being the ampersand. As you can see, they are different, and, as a result, the financing statement was found to be seriously misleading and the secured party lost a large claim. So the difference between "and" spelled out and ampersand is very crucial.
UCC Filings: Where to File. The general rule is to file in the central filing office where the debtor is located. There are a couple exceptions, if you notice the map on the right, Georgia and Louisiana. Georgia, you file at the county level, Louisiana, you file at the parish level. Some collateral exceptions to this rule are any kind of collateral involving fixtures, timber to be cut, minerals to be extracted from the earth. The filing location for these collateral exceptions are in the office where a mortgage would be recorded on the affected real property.
UCC filings determining the location of a debtor. To the left, individual and entity examples. With individuals, you find the location of principal residence, registered organization under state law, where organized or incorporated, registered organization under federal law, where designated by law or Washington, D.C., other non-registered organizations at place of business or chief executive office if there's more than one, and jurisdictions without a filing requirement Washington, D.C.
Next up is UCC monitoring. So you filed your UCC financing statement, but your diligence should have not have stopped there. Here are some monitoring options by way of portfolio monitoring.
So it's important to remember that changes in your debtor's name or status can affect your lien position. So it's crucial to monitor your portfolio for changes and to prevent lapsed filings.
And there are simple automated ways to receive alerts when things change. These are expiration tracking. Expiration tracking is included with our UCC filing service via CSCFinancialOnline on any UCC that you submit or import into the portal. It'll show email notifications of approaching dates. You can view copies of acknowledgements. Filing numbers auto-populated into the UCC-3, this would be filing duplication, which I'll cover in the CSCFinancialOnline demo, flexible reporting, and the notification frequency of your choice, which means you can get automated reports either daily, weekly, or monthly on really any UCC filing in your portfolio that is approaching expiration. And then you can pick whichever months out that you want to be notified about that.
Corporate tracking. This will notify you when a corporate debtor changes their corporate name. This is important so then you can amend your UCC filing to reflect that name change. If the debtor falls out of good standing or dissolves or merges, these will all help stay on top of your debtor activity.
Debtor tracking alerts you to new filings against your debtor, including new lending and terminations, even yours. What it'll also do is alert you if your debtor wrongfully terminates your UCC filing, which that can happen sometimes in life. We'll send email alerts with links to the tracking results, allowing you to evaluate findings and request copies if needed.
And bankruptcy tracking. Any delay in responding to bankruptcy filings can be costly. So what this tracking service will do is it'll monitor court records and compare them to your debtor name, street address, city, state, ZIP Code. You'll receive an email when there's activity.
Arming Yourself: CSC Resources. Secured Party Representation Services, also known as SPRS. As you know, UCC financing statements are public record, which means anyone can access your customer list by running a reverse UCC search. By using a secured party representative, like CSC, it'll prevent competitors from identifying those filings. SPRS centralizes inquiries. What that means is that we have a dedicated team to handle SPRS inquiries in a timely manner.
Some other CSC resources. Our blog. CSC provides you with an archive of filing office closings and communications, pending and new legislation, and UCC Article 9 updates. Also, our resources, white papers, filing guides, and on-demand webinars found on our website.
Tiffany: That's all the time we have today. If we didn't get to your question, we will contact you with a response after the webinar. We want to thank you to everyone who joined us today, and we hope to see you next time.