As reported here on December 8, New York Assembly Bill 9933, which amends Articles 1, 7 and 9 of the Uniform Commercial Code, has been awaiting action by Governor Andrew Cuomo. Under New York law, the Governor has 10 days, excluding Sundays, to either approve or veto the bill or to allow the bill to become law without his signature. We expect this to occur today, Wednesday, Dec. 17, with the changes to Article 9 becoming effective immediately.
The bill uses Alternative A to replace the existing 9-503 language for individual debtor names, thus requiring UCC financing statements to provide the name indicated on the individual debtor’s unexpired driver’s license or other state-issued photo ID card. If the debtor does not have a current New York driver’s license or state-issued ID card, then the financing statement must provide the individual name of the debtor OR the surname and first personal name of the debtor.
Assembly Bill 9933 does NOT contain language that dictates a change in the UCC forms approved for use in New York. In fact, it does not repeal the requirement to include entity type and state of formation on the UCC-1 for organizational debtors. Therefore, the 4/20/11 version of the uniform UCC financing statement form that is accepted in all other states that have adopted the 2010 Amendments to Article 9 will not be appropriate for filings in New York. We await word from the Department of State as to whether they will approve use of any forms other than the 2002 forms currently in use.
We also draw your attention to another important omission in the New York bill when compared to the uniform text of the 2010 Amendments: Part 8 Transition Provisions. The transition provisions approved by the American Law Institute and intended to be enacted with the full text of the 2010 Amendments provide that filings against individuals that were good under previous law would remain effective through the 5-year transition period without any action by the secured party, even if the individual name does not meet the new Alternative A driver’s license requirement. Without the transition provisions, pre-effective date filings that do not conform to Alternative A may be deemed seriously misleading due to what is effectively a change of name of the debtor. In such cases, secured parties will need to amend the names of individual debtors on such pre-effective date filings within 4 months of the amendments becoming effective in order to remain perfected in collateral acquired by the debtor after that 4-month period (See § 9-507(c)).