A Rose by Any Other Name Would Smell as Sweet (or Would It?): Filing and Searching in Article 9's Public Records

Abstract

This article examines an important and timely issue involving the perfection of security interests under U.C.C. Article 9. Article 9 was extensively revised over seven years ago, and one of the most significant revisions concerned the legal sufficiency of the secured party's filed financing statement, in particular the need for precision in setting forth the debtor's name on the financing statement. This revision created a shift away from the reasonably diligent searcher standard to the more stringent single search standard for measuring financing statement sufficiency.

This article proposes a carefully crafted solution to the problem of fairly and efficiently dividing the burdens of using the filing system between filers and searchers and urges state filing offices to adopt technological advances that would aid searchers. Properly resolving this issue is of critical importance in reducing costs of commercial and consumer lending, most of which are passed on to debtors.

Keywords: Article 9, Secured Transactions, Perfection, Financing Statements, Debtor's Name

JEL Classification: K22