Risk Management Blog

The last few years have seen a dramatic rise in the number of states that allow electronic filing (eFiling) of UCC documents. In fact, nearly every state now accepts UCC filings that are transmitted electronically in some way. In most cases, eFiling represents an improvement over traditional paper filing since eFiled documents are generally acknowledged quicker than paper filings and often incur a lower filing fee. However, there are a few instances where a secured party may elect to file a paper document or, in some cases, have to file it that way.

Several states make minor formatting changes to a UCC when the document is filed electronically. Some of the more common types of changes include adjustments to font type and font size, reformatting of collateral descriptions and change of text to ALL CAPS. In these cases, the acknowledgement copy a UCC filer receives back from the state may not look exactly like the document they prepared. Even though none of the content is changed in such a way that would challenge the effectiveness of the filing to perfect a security interest, some creditors are not yet comfortable with the practice.

Attachment pages can also lead to problems for electronically filed UCC documents. In many states, the filing office eFiling technology does not allow attachment pages to be submitted along with the UCC form, so if your transaction requires an attachment such as an inventory or equipment list you would need to submit your UCC document manually rather than electronically. In other states, the filing office allows attachments pages for eFiled documents but they automatically insert language in the collateral statement box for you that references your attachment.

Last week on the FCS blog, we discussed a recent online discussion in which several UCC experts and filing office administrators noted that in many states where electronic filing is supported, the online filing systems allow for the entry of only a single authorizing party name for UCC3 Amendments. For transactions where multiple authorizing party names are required, a UCC filer would likely need to file a paper document.

First Corporate Solutions’ (FCS) online UCC filing and portfolio management system offers eFiling in every state where the filing office accepts UCC documents electronically. The FCS system also will alert users when they are preparing a filing in a state where formatting changes may occur if the document is eFiled. And with FCS, users always have the opportunity to file manually “over the counter” if they prefer. Contact us today for a free online system demo – 800.406.1577 or info@ficoso.com.

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