UCC Filings

The Uniform Commercial Code (UCC) is a set of laws meant to standardize interstate business practices within the United States. The UCC is not a federal law, but has been adopted by all 50 states to ensure contracts will be enforced with the same methods, no matter of location.

When a secured party lender extends credit or loans money to a borrower, they create a UCC Filing financing statement with the appropriate state agency, usually the Secretary of State's office. This filing acts as a public notice, declaring the lender's security interest in the borrower's personal or business assets.

Today, UCC filings are most commonly created by lenders that need to prove legal first-position right of a borrowers collateral, should they default on their loan. UCC filings are also referred to as UCC liens.

CI conducts our UCC filing search by each name an applicant has, and each location they have lived. Normally, a person will only have one filing against them at a time, as other lenders don’t want to expose themselves to the risk, but that is not always the case. For roles that involve handling finances or sensitive financial information, UCC Filing searches provide valuable insights into a candidate's financial responsibility.

They reveal any outstanding debt on personal property, financial obligations, or past defaults that may affect the candidate's ability to manage commercial transactions or financial matters effectively. Finding a UCC filing on an applicant is not immediately adverse information, but it can escalate to the point of a judgment, at which time it becomes adverse.

There are a variety of forms and fees associated with these searches, so it is best to have a licensed professional help your hiring team in the process of gathering information.