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The Uniform Commercial Code (UCC) was first published in 1952 and consists of uniform
rules coordinating the sale of goods and other commercial transactions throughout the 50
states. The main purpose of the UCC was to provide consistency in state law because of
the prevalence of transactions that extend beyond one state. The UCC deals primarily with
transactions involving personal property (movable property).
The UCC is a model code, so it does not have legal effect in a state unless the UCC
provisions are enacted by the individual state legislatures as statutes. The rules for each
of the transactional areas covered by the UCC are divided into separate sections called an
"article. Michigan is one of the states that has adopted the 2010 amendments.
Q. 2. What were the significant changes that were made to UCC Article 9 related to the
name of the debtor on the financing statement?
A.
The first amendment, and what UCC considers to be the most important, is the revision to
section 440.9503, which provides greater clarity as to the name of an individual debtor to
be provided on a financing statement. The amendment now requires a filer to provide on
the financing statement, the name on the debtors drivers license, if the license has not
expired. If the debtor does not have a drivers license, the filer must either use the
individual name of the debtor or the surname and first personal name of the debtor.
With respect to trusts, the amendments indicated that the financing statement must provide
the name of the trust as identified in it the trusts organic records if it is specified. If the
organic record of the trust does not specify a name for the trust, the name of the settlor or
testator and sufficient additional information to distinguish a particular trust from others held
by the same settlor or testator.
Q. 3. What other changes were made to UCC Article 9 that will impact credit unions?
A.
The revisions to section 440.9316 added subsection (8) which protects a security interest
if a borrower moves to another state or sells to a debtor of another state. Article 9 currently
provides that perfection by filing continues for 4 months after a change in location by the
debtor. However, this temporary period applies only with respect to collateral owned by the
debtor at the time of change. If the borrower sells to a debtor of another state, previously
there was no perfection with respect to that new collateral unless and until the secured
party perfects pursuant to the law of the new jurisdiction. The amendments change this by
giving the filer a 4 month grace period for the secured party to perfect in the new jurisdiction.
Q.4.
A.