UCC Article 9 – Indexing of Secured Party Names with Titles in Washington, DC
Posted by Gennine Cooper
March 4, 2020
When filing UCCs in Washington, DC, we’ve experienced a few challenges with the incorrect indexing of names, etc. We are not alone in this struggle, as the District of Columbia has often been referred to as “the worst indexing system in the country.” While we’re pretty sure the folks at the DC Recorder of Deeds (ROD) didn’t intend for this to be the case, we’ve become accustomed to it and double check to ensure proper indexing of UCCs we file. Recently we ran into an issue we were sure was an error, which prompted us to do some digging, and we learned something new.
After filing a UCC1 financing statement with the DC ROD, our client requested a post-filing UCC search (search to reflect) to confirm both the indexing of the debtor and secured party names. The UCC1 listed the Secured Party as “ABC123, NA, as Agent” on the filing. The client intended to have the entire name of the secured party indexed in the ROD’s records. However, when searched, we found it was not indexed as submitted. We questioned what happened to the “as Agent” language in the secured party name. The DC ROD stated “as Agent” is considered a title, per their general indexing guidelines (not made available to the public). As a result, they can and had excluded the words in the indexing of the name.
We questioned the legality of this indexing rule and informally reached out to Norman Powell, of Young Conaway Stargatt & Taylor, LLP to ask his opinion on the matter. Norman Powell is considered the “go-to guy” for UCC matters, having authored various articles and presented many educational seminars on the topic of secured transactions. Mr. Powell agreed there was a bit of ambiguity in “capturing information as rendered in a filing and as prescribed by the rules consistent with Article 9.” He further went on to say unlike names of debtors, secured party names are not subject to the strict “search logic test” made applicable by 9-506. The secured party’s agency capacity is “purely optional and would not affect the effectiveness of the financing statement.”
So, in this case of the missing “as Agent”, we’ve learned this was not another “indexing error”, but rather the DC ROD truly was not required to include the title in the name of the secured party when indexing the name.
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