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January 21, 2012

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Bill Moore - CT UCC Business Consultant

Although a name affidavit might provide some legal clarity as to the parties attached in the transaction, it may not assist with the perfection of a financing statement under the filing rules of UCC RA9. The purpose of the Name Affidavit is to avoid any ambiguity with the names so that the borrower may not later claim that he/she is not the person named in the document and is not bound by the loan or liability – this does a good job at protecting the lender against the borrower. It may also help with signature issues in the event there is a claim of fraud. Here, the UCC RA9 rules would control perfection and assist with priorities against competing secured parties. The statute is clear that as a “public notice” system, perfection is obtained by filing under the correct legal name (according to the UCC RA9 statute) in the correct jurisdiction, provided it supplies an “indication of the collateral.” With that said, the name listed on the UCC would still have to be the “correct legal name” under Illinois UCC RA9 law and a name affidavit wouldn’t provide additional protection under UCC RA9.

Cheryl Stroben

If a name affidavit had been prepared and filed with the original loan documents, could this have alleviated the problem?

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