Revised Article 9 of the Uniform Commercial Code: An Introduction

The Uniform Commercial Code's Article 9-Secured Transactions was substantially revised in 1998 and then further amended in 2010. All fifty states have enacted the changes to create a uniform system of laws for commercial transactions. The changes to Article 9 did not fundamentally alter the law of secured transactions, but did introduce numerous significant changes designed to clarify and modernize the old version of Article 9. This article discusses the changes that were made.


First, Revised Article 9 has a substantially expanded scope. Among other things, "deposit accounts," "credit card receivables," "payment intangibles," "electronic chattel paper" and "supporting obligations" ( i.e., obligations, such as guaranties and letters of credit, that support the payment of an obligation in which a security interest has been granted) are included. In addition, Article 9 codified the "mortgage-follows-the-note" doctrine, by providing that perfection of a security interest in a payment obligation automatically perfects a security interest in property that secures the performance of such obligation. This significantly broader scope was designed primarily to simplify legal issues arising under securitizations, although its ramifications will also be felt in secured lending and other areas

Methods of Perfecting Security Interest

Second, Article 9 expanded and created more flexible methods of perfecting security interests. Specifically, the statute provides for perfection by "control" and for automatic perfection of security interests in certain types of collateral. Security interests in deposit accounts, letter-of-credit rights and electronic chattel paper are subject to perfection by control. The steps required to obtain control under Revised Article 9, however, vary depending on the type of property involved. Security interests perfected by control under Revised Article 9 generally have priority over security interests perfected under other means.

Filing Financing Statements

Third, Revised Article 9 simplified certain rules regarding the filing of financing statements. For example, a supergeneric description of collateral, e.g., "all property of the debtor," will be sufficient for filing purposes (although not in a security agreement). In addition, Revised Article 9 requires that the filing merely be "authorized," rather than signed, by the debtor. Finally, for almost all types of collateral, only a filing in the central office of the applicable jurisdiction will be required.

Choice of Law

Fourth, Revised Article 9 simplified choice-of-law rules regarding security interests perfected though filing. Under the old Article 9, the perfection of security interests in goods (except "mobile" goods) was accomplished through filing in the jurisdiction in which the goods are located, while perfection in intangible collateral, such as "accounts" and "general intangibles" was accomplished through filing in the jurisdiction in which the debtor is located. Revised Article 9 unified these rules by providing, in nearly all cases, for filing in the jurisdiction in which the debtor -- not the collateral -- is located.

Location of Debtor

Revised Article 9 will also introduce a less burdensome rule for determining the "location" of most types of debtor. Under the old Article 9, a debtor other than a natural person was deemed located at its "place of business," if it has one, or at its "chief executive office," if it had more than one. In a corporate world characterized by large multinationals and frequent mergers and restructurings, determining which office is the "chief executive office" can be nearly impossible -- but the penalty for an incorrect judgment in this regard can be a worthless security interest.

In contrast, under the Revised Article 9, the "location" of a corporate, LLC or limited partnership debtor is its jurisdiction of organization, thereby substituting an objective, readily-determinable standard for one that is subjective and elusive.

2010 Amendment

The changes made in 2010 were to provide greater guidance in supplying information for preparing financial statements. One point of clarification was the name of the debtor for the UCC statement. Two alternatives were provided by the Uniform Law Commission in determining the proper name for an individual and states were left to choose using the name on the driver's license or a person's individual name. The proper name for entities is the named used for the filing of the organization documents with the state.

Changes were made to perfection of a security interest in after-acquired property when a debtor moves to a new jurisdiction. Perfection will continue for four months, creating a temporary perfection for collateral for such property. In addition, temporary perfection was created for with respect to a new debtor because of a merger.

There were also several other technical changes to remove requirements for extraneous information on financing statements; clarification on correction statements; titles of goods kept in electronic form; and guidance for notice requirements for electronic dispositions of collateral.


Article 9 will always be extremely technical, requiring a close reading to ensure proper application. However, the changes made in 1998 and 2010 have addressed some of the glaring difficulties and have made it somewhat easier to file and perfect a lien on collateral for a debt.