How To Safeguard Client Portfolio List from UCC Public Record SearchesUCC
UCC searching and filing service providers go to great lengths to keep their customers’ data secure. Technology and in-house procedures provide safeguards to keep your data protected from outside sources. Since service providers, along with state and county filing offices, are the gatekeepers of public records containing transactional information, this is a good thing. The nature of the Uniform Commercial Code, however, exposes an important part of a lender’s confidential data to the public: their client list.
Lenders rely on security interests to manage their risk and perfect their security interest by filing UCC’s, but this means their client list is public record; every debtor on a UCC is that secured party’s customer! With every UCC financing statement filed, lenders basically open up their client list to the public, including competitors.
Some lenders get around this by using a DBA, or trade name, on their financing statement. For lenders that submit numerous filings, this is not typically the preeminent option. We covered the disadvantages of filing a UCC under a DBA in a previous blog post.
One of the most popular and effective solutions to this problem is to use our UCC Secured Party Representative Service.
Under Revised Article 9, UCC Section 9-502(a)(2), a financing statement must provide the name of the secured party or representative of the secured party. They key to FCS Secured Party Representative Service is that the code allows “a representative” of the secured party to appear on the UCC financing statement, which is where we come in. Here’s the excerpt from RA9:
§ 9-502. CONTENTS OF FINANCING STATEMENT; RECORD OF MORTGAGE AS FINANCING STATEMENT; TIME OF FILING FINANCING STATEMENT.
(a) Subject to subsection (b), a financing statement is sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a representative of the secured party; and
(3) indicates the collateral covered by the financing statement.
When you file a UCC1 with FCS UCC Secured Party Representative Service, we put our name on the financing statement as representative. In the instance of an inquiry, FCS will promptly forward all authenticated inquiries to you, the secured party, to respond directly. You’ll still perfect your security interest when you file a UCC-1, but we’ll help limit your exposure to competitors’ secured party searches. Secured party searches will no longer be an option, which keeps your client list secure from competitors. You will be able to keep track of all your UCC filings within our UCC portfolio manager just the same as without the service.
Find out more about First Corporate Solutions’ UCC Secured Party Representative Service here.