Is the form Spousal consent for UCC filing required for a spouse to sign on a consumer loan? If so, what conditions warrant the nonapplicant's signature on this form? Appreciate any answers

My system tells me it is required if taking a UCC on the individual. If it is business purpose and the spouse is not signing the loan documents, it would be required. If it's an LLC or Corp the answer may be different, but if borrower is an individual than I say yes it is required.

In every situation, business or individual, the debtor (i.e., the one with rights in the collateral) must sign something to authorize your filing or your filing is ineffective and you could be fined $500 for filing without this authenticated record.

If the debtor is signing the security agreement, no other form need be signed to authorize a financing statement. A security agreement can act as the authenticated record authorizing the filing.

We have the debtor sign a security agreement every time, but the spousal aspect is what I thought s/he was asking about.

Thanks..my question is revolving around Wis being a community property state. The husband is buying an atv for under $5,000 and only he is signing the note (he will be signing the marital purpose on the bottom of the note) and we are sending a tattle tale letter to the wife. So, with this in mind, do we need to have the wife sign the Spousal Conset for UCC filig form as well?

Then you would have the tattle tale notice and the spousal consent for the ucc filing. That is using WBA documents following their instruction. I apologize, I assumed it was business purpose before. I would advise both documents.

Tattle tale notice is because he took out the loan.

Spousal consent allows you to file the UCC against him.

Why would you need a spousal consent to allow you to file the UCC against him? He is the one that must sign something to allow a filing not his spouse. The spousal consent may be used for the security interest but not for the filing.

The spousal consent is a 'spousal consent for UCC filing' and according to WBA you need it. I think it's because you are taking 'marital property' as collateral even if just in his name, by being married to her in WI it is automatically marital property and upon attempting reposession, you could have trouble if you didn't have her permission. I am not an attorney, but that is how I understand it. Mostly I do it because it says I have to on my required forms from WBA.

I talked to the WBA, and they agreed with me, that the spousal consent authorizes a filing in the spouse's name. In your example, it is the authority to file in the wife's name and not the borrowing husband's name.

But if the consent only authorizes the filing you still have a problem. You still need to get something from the spouse that authorizes the security interest in her portion of the collateral to attach. All of the above problems are solved when you have the non borrowing spouse authenticate (sign) the security agreement. This is like the spouse consent for the filing but it also authorizes the security interest to attach to her 50% undivided interest.

I assumed the spouse was also signing the security agreement but not the note. It would be like having them sign the mortgage even if they aren't on the note as Tom says to attach to her interest.

So I just want to make sure I understand the consensus here.

If a married WI resident takes out a loan and the collateral is an ATV, the bank should have the borrower sign the note and both the borrower and the non-borrower WI resident spouse sign the security agreement and then that's it. No spousal consent for UCC filing? Then what is the purpose of that form?

Thanks

I would do that, and the spousal consent form as well. I believe that is the purpose of the form. It seems odd, as the borrower does not sign a consent to file a UCC, but they signed the note. However, that is just my opinion.

I usually charge when I get this specific, but here goes.



This is not something you do or not do based on consensus. If we all agree but we are all wrong, then you will lose in court. Read the Wisconsin Statutes, Title XL, Chapter 409 SECURED TRANSACTIONS:

1. In Subsection Section 409.102 it defines the debtor as the "person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor". This includes, in mpliska's example, the husband with his 50% undivided interest and the wife with her 50% undivided interest. [Section 409.102(1)(gs)(1)]

2. For a security interest to attach (e.g., the requirement to obtain a lien) the secured party (that's the lender) must make certain that the "debtor (husband and wife in the referenced example) has authenticated (signed) a security agreement that provides a description of the collateral". That is why you have the borrowing husband and the non-borrowing wife sign the security agreement so you will have a security interest in 100% of the collateral. [Section 409.203(2)(c)(1.)]

3. In order for a filed financing statement to be effective the debtor (husband and wife) must authorize such filing. Section 409.509 is titled: "PERSONS ENTITLED TO FILE A RECORD." In subsection (1) it states that a "person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor to a financing statement only if:

• 
  (a) The debtor authorizes the filing in an authenticated record". Note, the most common way we have someone authenticate is to have them sign.

Therefore, if you want to file on both the husband and the wife you must have both of them sign something that will authorize the filing.

Sub (1)(a) continues by stating "or pursuant to sub. (2) or (3)". The law then gives another way to obtain the authenticated record that authorizes the filing. The referenced sub (2) states:

"By authenticating or becoming bound as debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial financing statement, and an amendment" covering the collateral described in the security agreement.

Therefore, by having both the husband and wife sign the security agreement it did two thing:
1. It gave you a security interest in each parties 50% undivided interest, and
2. I authorized your filing in both the name of the husband and the wife.

No spousal consent needed. But if you like the redundancy of having two thumbs on one hand, go ahead.

Don't worry, I wouldn't base our process off a BOL thread, I just wanted to make sure I was following...for educational purposes.

Thanks for the response Tom and BQ.