How can a lender ensure that the protections it puts in place through Uniform Commercial Code filings (UCC-1s) are maintained over time? Traditionally, the answer has been to assign an employee or group to manually monitor and address expiring UCC-1s and file the appropriate continuations with UCC-3s. But, this entails inherent risks: As personnel change, oversight can lapse, and with employees increasingly responsible for a greater workload, keeping up with expiring UCCs can get lost amidst everyday demands. That’s what our client, a small-sized bank, found. They generally filed 30 to 40 continuations a year, thereby preserving the perfection that the UCC provides. While this may not represent a particularly high volume, letting any one filing lapse can have pronounced negative impacts for a business — especially if perfection on a large loan is lost. Even if a company like our client re-files, it risks losing that lien position and, by extension, risks losing the collateral. That’s why our Auto Continuation service has become an important part of our client’s overall lien management approach.
Learn more about Auto Continuation and how it can support you in compliance and audit functions. You can be assured that the process has been handled properly and you aren't exposed to risk.