Filing, Searching, and Perfection of Your Client’s Security Interests
Uniform Commercial Code (UCC) filings are complicated and contain a plethora of nuances that can cause frustration for even the most experienced legal professionals. Subtle errors when filing can lead to unperfected security interests, posing tremendous risk to the clients your firm represents.
Join us for a practical overview of:
- Ensuring proper debtor, secured party, and collateral information is entered
- Unique rules and restrictions imposed by different jurisdictions
- eFiling vs. paper filing
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.
Annie: Hello, everyone, and welcome to today's webinar, "UCC 101 for Law Firms: Filing, Searching, and Perfection of Your Client's Security Interests." My name is Annie Triboletti, and I will be your moderator.
Joining us today is Binh Nguyen. Binh is the senior sales engineer for UCC Lien Perfect, and has been with CSC since April of 2014. He conducts training on CSC Lean Perfect and works alongside our customers to assist the further development of the UCC platform for the law firm market. And with that, let's welcome Binh.
Binh: Thank you, Annie, for the introduction, and welcome, everyone, to today's webinar. As Annie had mentioned, my name is Binh and I'm a senior sales engineer on our UCC team. And so much of my job revolves around working closely with our customers to assist them and to understand their needs to help further develop our UCC platform. I've been with CSC since 2014, and much of my time has actually been spent in the UCC space, formerly as a product manager and an analyst.
Before we dive right into the webinar, I'd like to provide some background information about CSC as a whole. We support more than 10,000 law firms from coast to coast, and we also have a presence in many major cities around the world.
We were founded in 1899 and have been serving law firms since then for more than 121 years. We process over six million UCC transactions annually. So we have an extensive amount of experience handling UCC filings and searches. And we also provide many other services as well, including registered agent, entity and litigation management, and digital brand services.
For today's webinar, the primary focus will be to help those that are brand new to UCC and also those that may need a refresher due to the frequency in which they handle UCCs. I'll be spending some time discussing two major components for law firms when it comes to UCCs — searching and filing. I'll be providing a demonstration of our CSC Lien Perfect platform as well to aid you in filing your UCCs. We'll conclude with a Q&A session. So I would encourage all those attending to submit your questions throughout today's webinar using the Q&A widget located at the bottom of the screen.
Speaking of questions, I'd like to pose some questions to all of our attendees today. Are you following best practices for searching and filing? Are you filing against the correct debtor names every time? And are you monitoring your client's portfolio for upcoming filing expiration dates? By the end of today's webinar, we hope that everyone will be able to answer these questions positively and confidently.
The first major component when it comes to UCCs is searching, and this is the act of searching the public record for any and all liens that may be associated with the debtor. The following are best practices when it comes to searching, whether it's for an individual, a registered organization, a decedent, or a trust. To ensure that your search is as exhaustive and complete as possible, always include different name variations in your search criteria. CSC will be glad to assist you in conducting your search and presenting the results in an easy-to-read, consolidated manner.
Typically, once the search is complete, it's time to begin preparing your UCC filing. The two most important pieces of information on a UCC filing is the debtor and the collateral. Ensure that your filing is perfected by following best practices for filing against individuals and registered organizations. And also familiarize yourself with the impacts of the 2010 amendments.
If it's an individual debtor that you're filing against, determine if the jurisdiction where you're going to be filing is an "only if" or "safe harbor" jurisdiction. "Only if" jurisdictions require that the debtor name must be exactly what appears on the individual's driver's license. So it's more restrictive as it has to be exact. Safe harbor jurisdictions, on the other hand, are not as restrictive as other names are acceptable. The only downside is that the majority of the states are "only if" jurisdictions, which means they require that the debtor name for an individual be exact.
When it comes to registered organizations, there are best practices in ensuring that the proper debtor name is used. You can see over on the right side of the slide the recommended documents or records that should be referenced to ensure the exact organization name is used.
Unfortunately, an incorrect organization debtor name on a UCC filing can result in the secured party losing a large claim. There are many examples of this, but the one I'm using today refers back to a lawsuit in 2009, where the debtor name that appears in the UCC filing was not correct. An ampersand was used instead of the word "and," which, unfortunately, resulted unfavorably for the secured party. So it is critical that the debtor name is exact on the financing statement.
When preparing a UCC filing, one of the considerations is determining where to file. Generally speaking, the financing statement is filed in the central filing office where the debtor is located. This is typically the secretary of state or equivalent, with the exception of Georgia and Louisiana. If the collateral for the UCC filing happens to cover fixtures, timber to be cut, or minerals to be extracted, then, generally speaking, those UCCs will be filed at the county or the office where a mortgage would be recorded on the affected real property.
You can base your decision on where to file according to the location of the debtor. You can see on this slide the recommendations on where to file based on the type of debtor.
Now that we've determined the proper debtor name and filing office, you also need to consider whether the state where you're filing has any specific filing office requirements. For example, New York still operates on the older version of the UCC form and not the revised standard form that all other states will accept, which requires that the type of organization, jurisdiction, and the entity's organization ID, if applicable, is provided for each debtor. Florida and Tennessee requires a stamp tax and an indebtedness tax respectively. The tax calculations for each state vary, and the verbiage that needs to appear within the collateral is dependent upon whether the secured party or debtor will be paying the tax or if any tax is due. Lastly, North Dakota and South Dakota require the Social Security number or tax identification number of each debtor in the UCC filing. Understanding all of the various unique filing office requirements will help to reduce the risk of a rejection.
Once you have prepared the filing, you then have two options to file, either electronically or by paper. efile or electronic file is becoming more and more popular with law firms for several reasons. Nearly all secretary of state filing offices offer efiling, as well as a growing number of county filing offices. In fact, an increasing number of secretary of state filing offices will only accept electronic UCC filing submissions, such as Colorado, D.C., and West Virginia. State filing offices tend to charge a lower recording fee for efilings as opposed to paper filings. Not every state offers a public portal where everyone or anyone can submit their filings. Certain state filing offices require special accounts in order to submit filings. Later in the demo, you'll be able to see how CSC Lien Perfect will be able to handle electronic filings submitted in any state.
Paper filing, on the other hand, usually takes a significantly longer period of time to be recorded by the state filing office. Additionally, the character limits for each field are determined by the physical text area available on the form, which may not be lengthy enough to capture the full name or address of the debtor or secured party. Generally speaking, efiling allows more characters to be entered. And the one benefit to paper filing, though, is that filing offices are generally more accepting of collateral attachments, alternate filing types, and real estate filing options, when efiling may restrict those.
So now that you understand the basics of UCC searching and filing, how do you stay up to date with the changing world of UCC? You can use CSC's blog and Resources page to ensure that you are keeping abreast of filing office closings and communications, pending and new legislation, and overall UCC updates. We publish white papers and filing guides and offer on-demand webinars as well. And we're here to help you navigate through preparing, filing, and managing your UCCs.
I'd like to share with you some feedback that our users have provided. As you can see here, we have a user that says that, "The new program is fantastic. It's a lot faster than anything else we have used. The organizational flow is so much easier, and it really cuts down the time of preparing a UCC by at least half."
We also have another client that loves the fact that we have the electronic UCC filing service available. And it also allows them to be able to see the estimates or how much they're going to be expected to pay when it comes time for the invoice.
And another customer loved the fact that it makes filing Delaware UCCs so much easier. And my personal favorite is one of our customers mentioned that, "Kudos for making it easy so that someone who's 54 years old can use the application because it's so user-friendly."
If you're interested in using CSC Lien Perfect, then please contact your account manager or complete the poll after this slide to request access to CSC Lien Perfect. Please know that there is no additional fee or a subscription fee to use CSC Lean Perfect. Once we've provided you with access, you can immediately begin preparing and submitting your UCC filings.
Of course, we want to make sure that your initial experience using our platform is as successful as possible. So we offer multiple forms of support, including chat, phone, and email. And we're continuously improving upon our platform. So we encourage any and all feedback, suggestions, and recommendations from our customers.