According to a Commercial Factor article, a bevvy of amendments to the Secured Transactions portion of the UCC code will become effective on July 1st, 2013, and will directly affect the factoring business. While the changes are not drastic and are intended mostly for clarification, factors should be aware of the coming changes and how they will have to alter their operations to conform to the standards.
Debtor Name on Financing Statement: The rule as it is right now is that an “individual name” must be used on a Financing Statement, with no other guidelines. The 2013 amendment attempts to avoid confusion and improper filing by requiring that the name be as it appears on an unexpired driver’s license issued in the state the statement is in, or if they don’t have a driver’s license then it should the last name and first surname.
Perfection Rules: The existing law says that if there is a change of state for a debtor, there is a four month grace period to file a new Financing Statement in the new state. However, it does not apply to property bought between the move and the new filing. The amendment will change this exception.
Financing Statement Forms: The Financing Statement form has been modified in a few ways, including a removal for the field for social security numbers. Factors must be aware that some states might not accept the new forms without the SSN.
These are just a few changes to the rules, but will probably be the most pertinent to factors. It’s important to be up on new laws, no matter how insignificant, to avoid confusion and misfiling.