Risk Management Blog

Following up on our post from earlier this week, What are “Standard Search Logic” and the Model Administrative Rules?, here’s a behind-the-scenes look at how we created an online UCC search system that follows MARS guidelines.

An FCS online search report is intended to satisfy the requirements under the UCC Revised Article 9 Model Administrative Rules (MARS), which provide state filing offices with a set of guidelines for producing a legally compliant UCC lien search report. The FCS Online Search System was designed to satisfy the requirements under MARS while providing the searcher with increased flexibility.

Flexible search logic generates a more inclusive search report and addresses the inconsistencies in searches performed within states that did not effectively adopt the MARS guidelines. Further, these specially designed broad-based searching features aid in locating involuntary liens such as Federal and State Tax Liens, Judgment Liens and liens that may not be located in state databases limited to the MARS guidelines for the reporting of UCCs.

We recommend that users structure their search strings so possible variations of the name including abbreviations, alternate spellings and initials may be located. A successful search begins before the name is ever keyed into the system by considering what possible variations may exist and then using the proper search string to locate those name variations.

From the International Association of Commercial Administrators

T503 Search methodology – Search results are produced by the application of search logic to the name presented to the filing officer. Human judgment does not play a role in determining the results of the search.

503.1 Standard search logic – The following rules describe the filing office’s standard search logic and apply to all searches except for those where the search request specifies that a non-standard search logic be used:

• 503.1.1 There is no limit to the number of matches that may be returned in response to the search criteria.
• 503.1.2 No distinction is made between upper and lower case letters.
• 503.1.3 The character “&” (the ampersand) is deleted and replaced with the characters “and” each place it appears in the name.
• 503.1.4 Punctuation marks and accents are disregarded. For the purposes of this rule, punctuation and accents include all characters other than the numerals 0 through 9 and the letters A through Z (in any case) of the English alphabet.
• 503.1.5 The following words and abbreviations at the end of an organization name that indicate the existence or nature of the organization are “disregarded” to the extent practicable as determined by the filing office’s programming of its UCC information management system:
• 503.1.6 The word “the” at the beginning of an organization debtor name is disregarded.
• 503.1.7 All spaces are disregarded.
• 503.1.8 For first and middle names of individual debtor names, initials are treated as the logical equivalent of all names that begin with such initials, and first name and no middle name or initial is equated with all middle names and initials. For example, a search request for “John A. Smith” would cause the search to retrieve all filings against all individual debtors with “John” or the initial “J” as the first name, “Smith” as the last name, and with the initial “A” or any name beginning with “A” in the middle name field. If the search request were for “John Smith” (first and last names with no designation in the middle name field), the search would retrieve all filings against individual debtors with “John” or the initial J as the first name, “Smith” as the last name and with any name or initial or no name or initial in the middle name field.
• 503.1.9 If the name being searched is the last name of an individual debtor name without any first or middle name provided, the search will retrieve from the UCC information management system all financing statements with individual debtor names that consist of only the last name.
• 503.1.10 After using the preceding rules to modify the name being searched, the search will retrieve from the UCC information management system all Unlapsed Records, or, if requested by the searcher, all Active Records, that pertain to financing statements with debtor names that, after being as provided in this rule 503, exactly match the modified name being searched.

Want to see our online UCC system in action? Sign up here for a free demo. If you have any questions, please feel free to contact us here or by calling  800.406.1577. As always, if you are unsure of any definitions or procedures, consult your legal counsel immediately.

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