CT Lien Solutions Blog

New legislation affects filing in North Dakota

We’ve got an update on new legislation affecting filing in North Dakota. However, don’t confuse this with the flurry of legislative activity we’re seeing with states adopting NCCUSL’s proposed amendments to the UCC Article 9! This piece of legislation is not an amendment to the Article 9. However, if you are filing UCCs in ND, you’ll want to read on.

On April 26, 2011, the Governor of North Dakota signed into law Senate Bill 2249. The bill removes several of the non-uniform filing requirements that exist in North Dakota regarding social security numbers and federal tax identification numbers on financing statements.

North Dakota’s current law requires that a social security number or federal tax identification number be included on any financing statements filed under Article 9 of the UCC or the Food Security Act. In addition, current law authorizes the filing office to reject any financing statements that do not contain these numbers.

Under the new law, effective January 1, 2012, both of these provisions have been deleted. As a result, parties filing UCC financing statements after this date will no longer be required to provide this information.

Revised matrix - State-by-state breakdown of new UCC Article 9 legislation

We have revised our reference matrix of the state-by-state breakdown of the new Article 9 legislation, to account for Indiana's enactment of new amendments. We have also added hyperlinks to the code section titles in the matrix header row. To get a better understanding of what is changing in each section of the code, click on these hyperlinks to be routed to previous blog posts providing more detail. (For example, clicking on "9-503: Name of Debtor and Secured Party" in the header row of the matrix will take you to a previous post which describes the difference between Alt A and Alt B).

Download the revised matrix here. To view the status of each bill on the state legislature website, click on the hyperlink embedded in the Bill #.

We will periodically keep you updated as the legislation continues to change, so check back into the blog frequently.

Partial assignment surviving termination of original lien by original SP

We recently received the following question from a reader:

If XYZ bank:
1. has a blanket lien
2. grants a partial assignment of accounts receivable to ABC Corporation
3. then files a termination of its original lien

Will ABC's partial assignment of accounts receivable survive the termination?

The answer is yes. Once the partial assignment was made, there would be two secured parties (SP) of record. When the first SP filed the termination statement, it would only terminate its own interests, not the entire filing. The SP of record remains perfected.

 

May jurisdictional holidays

Set forth below is the State Holiday List for the month of May 2011. As always, please bear in mind that these dates are accurate as of the date of publication, but subject to change as states often make last minute revisions to their holiday closing schedules.

State	Holiday	Date
IN	Primary Election Day	May 3
HI	Furlough Day	May 6
MO	Truman Day	May 9
SC	Confederate Memorial Day	May 10
HI	Furlough Day	May 20
KY, ME, MD, WI	Furlough Day	May 27
ALL, except LA*	National Memorial Day (observed)	May 30

*Please note that the LA governor has not yet proclaimed Memorial Day a holiday. However, we believe based on prior years that May 30 will ultimately be declared a holiday in LA.

IN fourth state to enact new UCC Article 9 laws

On April 20, the Governor of Indiana signed into law IN HB 1321, making Indiana the fourth state to enact new UCC Article 9 amendments. Like Nebraska and North Dakota, Indiana has adopted Alternative A for 9-503, so searchers can breathe a sigh of relief—if the individual has an IN driver’s license or state ID, that’s the name you will need to search under beginning July 1, 2013.

Lenders filing in Indiana, Nebraska and North Dakota, since you know that as of July 1, 2013, your filings for individual debtors must be made under the name contained on the state driver’s license or ID of the individual, it’s not too soon to start conforming.

Revised matrix - State-by-state breakdown of new UCC Article 9 legislation

We have revised our reference matrix of the state-by-state breakdown of the new Article 9 legislation, to account for the District of Columbia's proposed legislation, as well as Nebraska and Washington's enactment of new amendments.

Download the revised matrix here. To view the status of each bill on the state legislature website, click on the hyperlink embedded in the Bill #.

We will periodically keep you updated as the legislation continues to change, so check back into the blog frequently.

Nebraska and Washington enact new UCC Article 9 laws

Two more states enacted new UCC Article 9 amendments last week. On April 14, Nebraska and Washington signed into law NE LB 90 and WA HB 1492, respectively.

Nebraska’s bill is uniform to the model act* across the board, with Alternative A chosen for 9-503, and reference to placeholder text only for 9-521.

Washington treats 9-521 the same and is also uniform in all respects, except the state has opted for Alternative B for 9-503. This means that unlike North Dakota and Nebraska, Washington will allow for a “safe harbor” in individual debtor names. If an individual debtor has a WA driver’s license, the financing statement is sufficient if it uses the name found therein. However, unlike Alternative A, it also allows for other individual names to be used, such as the surname and first personal name.

What does this mean in a practical sense? Well, searchers beware in Washington. Under Alternative B, a variety of debtor names will be sufficient, so searchers will need to conduct a more expansive search to ensure that all possible name variations are uncovered.

*For more information about the various provisions of the model act, visit the “Legislation and Judgments” category of this blog.

Revised matrix - State-by-state breakdown of new UCC Article 9 legislation

We have revised our reference matrix of the state-by-state breakdown of the new Article 9 legislation, to account for ND's enactment of HB 1137. (Click here for details on this reference guide from our original blog post).

Download the revised matrix here. To view the status of each bill on the state legislature website, click on the hyperlink embedded in the Bill #.

We will periodically keep you updated as the legislation continues to change, so check back into the blog frequently.

North Dakota first state to enact new amendments to UCC Article 9

On April 4, 2011, North Dakota’s Governor signed into law HB 1137—making ND the first state to officially adopt the new amendments to the UCC Article 9.

The amendments are uniform across the board. As regards section 9-503: Name of Debtor and Secured Party, ND enacted Alternative A. Alternative A provides that if an individual debtor has a driver’s license issued by the State of North Dakota, the financing statement must use the name indicated on that license. If an individual debtor does not have a driver’s license or ID issued by ND, the financing statement must use the surname and first personal name of the individual.

No reference was made in the bill to amending the UCC-1 and UCC-3 forms.

State-by-state breakdown of new UCC RA9 legislation

State by state across the nation, legislation is being considered to adopt new UCC RA9 amendments. Not all of the bills are uniform. With 50 states and the District of Columbia, it is a complex undertaking to stay on top of all the latest developments. We hope we can make it easy for you; download our reference matrix for details by individual state. To view the status of each bill on the state legislature website, click on the hyperlink embedded in the Bill #.