The document discusses upcoming changes to UCC Article 9 including clarifying rules around control of electronic chattel paper, location of debtor provisions, and continued perfection following a change in governing law. It also covers creating a security interest, such as how attachment works for future advances and automatic attachment for certain collateral types. The presentation provides an overview of the revisions and important concepts in secured transactions.

1. UCC Article 9 Update
Stay in compliance & be prepared for
upcoming changes
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2. Today’s Agenda
• MODULE # 1 – Secured Transactions Governed
by Article 9
• MODULE # 2 – Changes to UCC Article 9
• MODULE # 3 – Creating a Security Interest
• MODULE # 4 – Perfecting a Security Interest
or Agricultural Lien
• MODULE # 5 – Priority of Security Interests
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3. MODULE # 1 –
Secured Transactions
Governed by Article 9
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4. Overview of Article 9
UCC Article 9 deals with secured transactions in
personal property such as:
chattels
rolling stock
machinery
equipment
It sets forth procedures by which to:
establish
perfect
maintain
enforce
A secured interest. 4

5. Exclusions - Insurance
Article 9 does not apply to a transfer of an
interest in or assignment of a claim under a
policy of insurance, except when the interest in
insurance represents proceeds of collateral or is
an assignment of a healthcare insurance
receivable.
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6. Exclusions – Tort Claims
Article 9 does not apply to an assignment of a
tort claim, except when the claim is a
commercial tort claim or the tort claim is a
proceed of collateral.
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7. Exclusions - Consumer
Transaction Deposit Account
 Assignments of a deposit
account in consumer
transactions, e.g., checking or
savings account maintained at a
bank or credit union, are
excluded from Article 9.
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8. Exclusions - Statutory Liens
 Statutory liens arising by rule of law are not
consensual and are excluded from Article 9.
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9. MODULE # 2 –
Changes to UCC Article 9
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10. Change to Definition of
Public Records (UCC §
9-102(a)(68))
♦Currently - the correct name for a registered
organization for inclusion in a financing
statement is the one on the “public record.”
♦Revised code - will use the term “public organic
record,” meaning a record that is available for
public inspection.
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11. Chattel Paper
A record or records that evidence both a monetary
obligation and a security interest in any one of 5 things:
2.both a monetary obligation and a security interest in
specific goods,
3.a security interest in specific goods and software used in
the goods,
4.a security interest in specific goods and license of
software used in the goods,
5.a lease of specific goods,
6.a lease of specific goods and license of software used in
the goods.
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12. Clarification to Rules Relating
to “Control” of Electronic
Chattel Paper (UCC § 9-105)
♦ Currently - Section provides a six-factor test for
whether a secured party has control of
electronic chattel paper (ECP).
♦Revision - adds a general test, requiring that the
system employed to evidence the transfer of ECP
“reliably establish” the secured party as the
person to which the chattel paper was
assigned.”
♦The six-factor test retained as a safe harbor.
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13. Change to Location of
Debtor Provision (UCC §
9-307)
♦ Currently - Section provides the rules for
determining a federally-organized debtor’s
“location,” and thus the state in which a
financing statement naming that debtor must be
filed.
♦ Revisions - Clarify that for registered entities
organized under federal law (e.g. banks), the
“main office” or “home office” is the
organization’s “location” for purposes of filing
the financing statement. 13

14. Continued Perfection of Security
Interest Following Change of
Governing Law (UCC § 9-316(h))
♦Currently - Section provides that perfected security
interests that attach prior to a debtor’s move to another
state remain perfected for four months after the move.
♦Revisions - New subsection (h)
♦Provides for continued perfection of newly-acquired
security interests that attach within four months after
the debtor moves, so long as the secured party has
taken steps that would have perfected the security
interest in the debtor’s original state.
♦Perfection continues until the end of the four-month
period. 14

15. Continued Perfection of Security
Interest Following Change of
Governing Law (UCC § 9-316(i))
♦Currently - Section provides that perfected security
interests that attach prior to a debtor’s move to another
state remain perfected for four months after the move.
♦Revisions - New subsection (i)
♦Provides for automatic perfection of security interests
that attach within four months after a new debtor in
another state becomes bound by an existing security
agreement with the original debtor (e.g. by merger) –
so long as the secured party has taken steps that
would have perfected the security interest against the
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original debtor.

16. Changes to Debtor Name
Provisions (UCC § 9-503)
♦ Currently - Section 9-503 determines when a financing
statement sufficiently provides the correct name of a
debtor.
♦Revisions - Amended § 9-503 states that for registered
organizations, the name of the debtor will be sufficient if
it matches the name on the public organic record most
recently filed in the jurisdiction of organization.
♦ For individual debtors, the code provides two
alternative provisions. State legislatures may choose the
one that best meets the needs of their constituents.
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17. Alternative A, the “Only if”
Option (UCC § 9-503)
If the debtor has a current driver’s license or
other state identification the financing
statement may use the name on the driver’s
license.
If - and only if - the debtor does not have a
driver’s license, the financing statement may use
the debtor’s first personal name and surname.
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18. Alternative B, the “Safe
Harbor” Option (UCC §
9-503)
♦The financing statement sufficiently names the
debtor by providing:
(a) the debtor’s individual name as determined
by state law,
(b) the debtor’s surname and first personal
name, or
(c) the name on an unexpired driver’s license or
other state identification.
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19. Organizational Information on a
Financing Statement
(UCC § 9-516)
♦ Current - § 9-516 provides that a financing
statement can be rejected if it fails to state the
debtor’s (1) type of organization, (2) jurisdiction
of organization, and (3) organizational
identification number.
♦Revisions - The new amendments eliminate any
requirement for this data.
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20. UCC-5 Correction Statement
♦Currently - a debtor may file a UCC-5 Correction
Statement when it wishes to add a remark to the
public record regarding a given financing
statement.
♦Revisions –
♦These filings renamed “Information
Statements”
♦Secured parties allowed to file them as well.
These statements have no legal effect.
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21. Changes to National UCC
Forms (UCC-1 and UCC-3)
he ULC has proposed new national UCC forms that incorporate
the proposed revisions to Article 9.
opies of those new forms are available at:
ttp://www.iaca.org/downloads/2010Conference/STS/4_Draft_UCC_Forms_041910.pdf
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22. MODULE # 3 –
Creating a
Security Interest
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23. Value and Rights
in the Collateral
An attached and enforceable security interest
requires that:
(1) the secured party give value to the debtor,
(2) the debtor have rights in the collateral, and
(3) the debtor indicate its agreement to give a
security interest in the collateral.
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24. Automatic Attachment for
Security Interests in Specific
Types of Collateral (§9-203(f))
A security interest automatically attaches to a
supporting obligation for the collateral and gives a
secured party the right to the proceeds of the collateral.
“Supporting obligation” - A letter-of-credit right or
secondary obligation that supports the payment or
performance of an account, chattel paper, a general
intangible, an instrument, or investment property.
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25. Attachment and New
Debtors
• Original debtor - a person that, as debtor,
entered into a security agreement to which a
new debtor has become bound.
• New debtor - a person that becomes bound as
the debtor by a security interest previously
entered into by another person.
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26. Future Advances
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27. Debtor’s Request of a List of
Collateral and a Statement of
Account
Section 9-210 requires the secured party to respond to a
request by the debtor for any of three types of information:
• Accounting - a request that the secured party provide an
accounting of the unpaid obligations secured by the collateral.
• List of collateral - debtor requests that the secured party
approve or correct a list of what the debtor believes the
collateral actually consists of.
• Statement of account – a request that the secured party
approve or correct a statement of what the debtor believes
the aggregate amount of unpaid obligations secured by the
collateral is as of a specified date.
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28. Debtor Requests
• Secured party only has to respond to requests
from the debtor.
• Secured party only has to respond if the request
has been properly made, e.g., must reasonably
identify the transaction that’s the subject of the
request.
• Debtor is entitled – without charge – to one
response during any six-month period.
• The secured party can charge $25 for each
additional response.
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29. MODULE # 4 –
Perfecting a
Security Interest or
Agricultural Lien
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30. Financing Statement
(§9-102(a)(39))
A record or records composed of an initial
financing statement and any filed record relating
to the initial financing statement.
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31. Financing Statement
Factoids
Must be filed in the office designated by the jurisdiction
that governs perfection of the security interest.
 Most are effective for 5 years from the date of filing and
can be continued for 5 year periods.
A continuation statement can be filed within six
months of the expiration of the applicable period. It
cannot be filed before that 6-month period or after it.
A timely filed continuation statement continues the
effectiveness for another 5 years commencing on the
day the financing statement would have lapsed.
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32. Perfection through Control
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33. MODULE # 5 –
Priority of
Security Interests
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34. First-to-file-or-perfect rule
The first secured party to file a financing
statement covering the collateral or to otherwise
perfect will have priority over competing
security interests.
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35. Possessory Liens
• Lien on collateral arising by operation of law.
• Possessory liens generally have priority over a
security interest in the collateral.
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36. Thank you
for participating today!
Don’t forget to visit our website:
www.careertrack.com
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or Call (800) 556-3009