Cooperative UCC Filing- Continuation

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Question:

The filing period of a financing statement is 5 years and one of the exceptions is "Cooperative Filing - effective 50 years." For example, if we (the bank) had granted a 15-year co-op mortgage loan to the customer several years ago and filed a UCC-1 on the unit at that time, would this UCC filing be effective for 50 years and would we not have to file a continuation every five years?

Answer:

Answer by John Burnett: I see nothing in Article 9 of the "vanilla" version of the UCC that mentions "cooperative filing." Perhaps this is something unique to the version of Article 9 adopted in your state.

As to whether a filing that preceded your state's adoption of the current version of the Article will have a 50-year effective term, I suggest you contact counsel familiar with this kind of filing in your area.

Article 9 is one that varies widely from state to state.

Answer:

Answer by Sam Ott: I agree with John. The text of the proposed draft of Revised Article 9 does not contain an execption for "cooperative filing" or a 50-year term for any filing.

There is a provision that the filing of a financing statement involving either a public-finance transaction or a manufactured-home transaction is effective for 30 years.

See 9-515(b)

First published on BankersOnline.com 8/02/04