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Handling A UCC Release

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Question: 
Does the bank have to record the release of a UCC, or is it sufficient to sign the release and give it to the customer and let them deal with it?
Answer: 

Under Revised Article 9, if the financing statement covers consumer goods, the secured party is required file or cause to be filed a termination statement (release) if the obligation is paid and there is not a commitment to make an advance, occur an obligation or otherwise give value. In addition, if the debtor did not authorize the filing of the initial financing statement, the secured party must file a termination. The termination must be filed with one month after not obligation exists or if earlier, within 20 days after the secured party receives an authenticated demend from the debtor.

If the financing statement does not cover consumer goods, a secured party who receives an authenticated demand from the debtor has the option of sending the termination statement to the debtor or filing it. The termination statement must be sent or filed within 20 days after the demand is received.

First published on BankersOnline.com 12/3/01

First published on 12/03/2001

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