people discussing UCC-3 lien basics around a table
ComplianceFinanceMarch 30, 2017

Your questions answered: What is a UCC-3?

In the financial world, there is always work to be done to maintain healthy portfolios and keep the financial institution operating effectively. If you’ve filed a UCC-1 to secure interest or collateral, then you might also be aware that amendments, continuations, and terminations may need to be filed to protect your interest in the original lien. That’s where a UCC-3 comes in.

What is a UCC-3 used for?

If you’ve ever asked yourself what a UCC-3 lien is, then we’re here to help give you answers. 

UCC filings are financial statements that are filed to give notice to other creditors of your security interest in a lien. A UCC-3 is used as a way to amend that original lien filing and do things like terminate the UCC, edit any of the details of the lien, or assign your interests to another secured party for the lien. 

Common reasons why an entity would file a UCC-3

UCC-3s are used in a variety of transactions and are a key part of the life cycle of a loan. They help you secure your assets and ensure that the details of a UCC are accurate. There are many reasons why entities want to file UCC-3s. 

UCC-3s can be used to extend the life of a loan beyond its original five-year lifespan. Financial institutions can also use a UCC to edit the details of their lien if a debtor's name or address changes. A UCC-3 can also be used to add new secured parties or change the collateral in the original UCC to more accurately reflect the current state of the loan.

Types of UCC-3 filings

A UCC-3 filing is a term that covers many different types of filing. After all, a UCC-3 is defined as a filing used to make any changes to a UCC-1 filing, including either continuing or terminating the original UCC lien filing. Put another way, UCC-3s are amendment filings to the original UCC financing statement, and there are five different types of UCC-3 filings: 

  • UCC-3 continuation: A UCC-3 continuation is a type of filing that extends the life of the financial statement by another five years.
  • UCC-3 party amendments: A UCC-3 amendment is a type of filing used to change or add critical information about the debtor or the secured party. For example, they can be used to change the name or the address.
  • UCC-3 collateral amendments: This type of filing is used to add collateral, remove collateral, or restate the entire collateral description. Prior to the UCC RA9, collateral amendments were also called “releases”. 
  • UCC-3 assignments: This type of filing is used to transfer rights in a filing from one secured party to another. There are both “partial” and “full” assignments.
  • UCC-3 terminations: A UCC-3 termination is used to extinguish the lien before its five-year term has ended.

Who can file a UCC-3 termination?

New rules about UCCs, referred to as UCC RA9, have changed the ways UCC-3 terminations are filed. Keep in mind that debtors can file terminations because RA9 does not require signatures on the filings. Therefore, you may not be aware that one of your liens has been terminated. Select service providers offer monitoring services, which will let you know when another party files a termination on one of your UCCs. 

Common UCC-3 filing mistakes

As with many types of filing and requests, there is room for error. These errors can lead to big issues down the road with your UCC-3 requests, so make sure that you are keeping your eye on these areas to avoid mistakes with your UCC-3 filing.

  • Incorrect file number: Normally, this is because a state has changed the format of its filing numbers.
  • Incorrect file data: With the help of a service provider’s technology and service professionals, retrieving all of the correct filing data becomes less of a risk.
  • Multiple transactions on the same form: Prior to RA9, a number of states would allow multiple transactions — for example, a continuation and an amendment on the same form. More than half of all states now require only one transaction per form. This allows a UCC to be filed electronically for faster filings and acknowledgment and lower costs in many states. 
  • Continuation not filed within proper window: Continuations can be filed either too early or too late. It’s always best to make changes as soon as possible, but as a few guidelines:
    • Changes to the debtor’s name must be filed within four months of the name change
    • In most cases, continuations may be submitted no earlier than six months prior to the expiration date (every five years)
    • In all other cases, file as soon as possible

Discover more about UCC basics

If you are interested in learning more about how Lien Solutions can help you with your UCC filings and support your business growth, then read our page on UCC filing and public records search. There you’ll discover more about our practices and how we can help your financial institution grow. 

Amanda Rasizzi of Lien Solutions
Director of Marketing
Amanda (Rasizzi) Blooflat is Director of Marketing for Wolters Kluwer Lien Solutions. She oversees all marketing activities for the company. Rasizzi and her team communicate the company’s array of lien management, risk management, and life-of-loan solutions to prospects and clients, support the selling efforts of the Lien Solutions organization, and position the organization as an industry market leader. 
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