– The State of Texas just enacted amendments to its version of Revised Article 9. Senate Bill 1540 amended the debtor name requirements for individuals and registered organizations found in the Texas version of UCC § 9-503(a), according to the National Auto Auction Association (NAAA). The law took effect immediately when the governor signed the bill on June 16. All secured parties filing in Texas must be aware of the new law and its requirements.
The amendments changed the Texas version of § 9-503(a)(1) to clarify that a registered organization name is sufficient only if it provides the name found on the debtor’s formation documents, such as the articles of incorporation, including any amendments. This differs from the uniform law, which specified the name found in the “public record.” This means that using the name found in the Texas Secretary of State’s corporations database is not sufficient if it differs from the formation documents.
The other significant change involves sufficiency of individual debtor names. Revised Article 9 provided little guidance for secured parties when it came to individual debtor names. The Texas legislation amended the state’s version of § 9-503(a)(4)(A) to create a safe harbor if the financing statement provides the individual’s name found on the driver’s license or identification certificate issued by the debtor’s state of residence.
Secured parties must be aware of these changes and, if necessary, adjust their process for determining the debtor name for filing in Texas. If the debtor is a registered organization, the only reliable source of a debtor name is the articles or equivalent formation documents as amended. If the debtor is an individual, the secured party should provide the name found on the person’s driver’s license or state-issued identification certificate.