The California State Senate is currently reviewing a bill that would amend the UCC Article 9 so that the debtor’s name on the financing statement would read as it appears on his or her California driver’s license or state identification card. This bill would amend 9-503(a)(4) to adopt a “clean” Alt A for sufficiency of debtor name and make California law consistent with the majority rule.
Sponsored by the California Bankers Association, AB 1858:
- Requires a filer to provide on the financing statement the name indicated on the debtor's driver's license or identification card, if the debtor is an individual to whom the California Department of Motor Vehicles (DMV) has issued a driver’s license or identification card that has not expired.
- Provides that if the debtor does not have a driver's license or identification card, the filer must provide on the financing statement either the individual name of the debtor, or the surname and first personal name of the debtor.
- Clarifies that the most recently issued driver's license or identification card is to be used if more than one was issued by the DMV.
- Prohibits discrimination in the provision or terms of credit against people who do not hold or present a driver's license.
In 2013, the California Legislature approved into law a bill (AB 502) that amended the UCC in regards to debtor’s names. However, provisions regarding the use of driver’s licenses were dropped before final approval due to concerns about possible discrimination against people without a driver's license. AB 1858 is meant to address those discrimination concerns and to correct some lingering confusion about what constitutes a sufficient debtor’s name resulting from the earlier law.
AB 1858 was introduced in February 2014. The Assembly Judiciary Committee unanimously approved the proposed measure as amended 10-0 in April and forwarded it to the full Assembly for consideration. It was approved by a 73-0 vote on May 23 and sent on to the California Senate for further consideration.