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UCC service offers convenience, efficiency
October 30, 2002
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Secretary of State Candice S. Miller today announced that financial institutions, farmers, law firms, businesses and other customers submitting Uniform Commercial Code (UCC) filings or requesting UCC searches will now obtain results faster under a new system being implemented by the Department of State.
"In today's fast-paced business climate, the department's UCC system plays an important role in making business loans happen with all the security financial institutions need," Secretary Miller said. "Advances in technology now make it possible for the department to respond to filings and searches faster and with greater efficiency than ever before."
Secretary Miller provided examples of how critical UCC is in everyday life. She explained that if farmers need to take out a loan to purchase more equipment, livestock or seeds for crops, or if a business wants to expand operations, the collateral they put up against the loan will be entered onto a financing statement. The bank or loan company processing the loan then files the financing statement with the department's UCC office. If the farm or business decides to apply for other loans through different companies, the financing statement can be reviewed by the new lender to see what other loan agreements have been filed and what collateral has been listed.
The new UCC system dramatically cuts turnaround time for processing filings and search requests from two weeks to a matter of a few days using state-of-the-art hardware and software developed by Northrop Grumman Information Technology.
In fiscal year 2001, the UCC Unit processed 185,151 filings, 17,796 tax liens, 82,686 search requests and responded to 29,564 telephone calls.
The new system also transforms the department's current process into a more automated and accurate system. Bar codes are used to separate documents and prepare them for scanning into electronic images. Information is scanned, stored and retrieved electronically, eliminating the need to prepare paper documents for microfilm. Acknowledgement copies noting receipt of customer filings are generated automatically by the system. Filings will be immediately included in the UCC database used to generate searches for named debtors.
The new UCC system is the first phase of a project designed to meet recent revisions of Article 9 of the UCC statute, which established a new fee structure and changed procedures for submitting filings and search requests. The second phase of the project, which is being developed by IBM and is expected to be ready by the year's end, will allow UCC customers to request debtor-name searches and submit financing statements over the Internet.
UCC law governs commercial transactions, such as sales, negotiable instruments, bank deposits and collections, and investment securities, and has been enacted, in one form or another, in all 50 states. Article 9 requires the Secretary of State to file and process UCC financing statements and search requests related to secured transactions.
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