BILL ANALYSIS �
AB 2667
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2667 (Banking & Finance) - As Introduced: March 5, 2012
PROPOSED CONSENT
SUBJECT : Personal property: fraudulent transfers
KEY ISSUE : SHOULD CIVIL CODE PROVISIONS REGARDING THE TRANSFER
OF PERSONAL PROPERTY BE CONFORMED WITH THE COMMERCIAL CODE TO
HELP ENSURE REQUIRED FILINGS CAN BE DONE ELECTRONICALLY?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
Under current law, a transfer of personal property not
accompanied by an actual transfer of the property is void as
against the transferor's creditors unless it satisfies one of
several exceptions. One of those exceptions is that the
transferor files a financing statement, signed by the
transferor, with the Secretary of State's office and publishes
notice of the intended transfer at least 10 days before the date
the transfer occurs. This non-controversial bill, sponsored by
the Commercial Transaction Committee of the Business Law Section
of the State Bar, eliminates the requirement that a financing
statement be signed by the transferor, and instead requires that
the transferor authorize the filing in an "authenticated
record," thus allowing for paperless filing. There is no known
opposition to the bill.
SUMMARY : Allows a transferor of personal property to file a
financing statement, authorized in an authenticated record, with
respect to the property transferred and does not void such a
transfer as against the transferor's creditors.
EXISTING LAW :
1)Provides that a transfer of personal property not accompanied
by delivery and change of possession is void against the
transferor's creditors. (Civil Code Section 3440.)
AB 2667
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2)Exempts certain types of transfers from #1, above, including
where a transferor or transferee files a financing statement
with the office of the Secretary of State, subject to
specified rules including that the transferor sign the
financing statement, and publishes notice of the intended
transfer at least 10 days before the date the transfer occurs.
(Civil Code Section 3440.1.)
3)Provides that a financing statement is sufficient if it
satisfies specified conditions, including that the debtor
authorizes the filing in an authenticated record or as
provided. (Commercial Code Section 9501, 9509.)
4)Defines "authenticate" as either of the following: To sign or
to execute or otherwise adopt a symbol, or encrypt or
similarly process a record in whole or in part, with the
present intent of the authenticating person to identify the
person and adopt or accept a record. (Commercial Code Section
9102.)
5)Defines "record" as information that is inscribed on a
tangible medium or which is stored in an electronic or other
medium and is retrievable in perceivable form. (Commercial
Code, Section 9102.)
COMMENTS : Under current law, a transfer of personal property
not accompanied by an actual transfer of the property is void as
against the transferor's creditors unless it satisfies one of
several exceptions. One of those exceptions is that the
transferor or transferee files a financing statement, signed by
the transferor, with the Secretary of State's office and
publishes notice of the intended transfer at least 10 days
before the date the transfer occurs. This bill, sponsored by
the Commercial Transaction Committee of the Business Law Section
of the State Bar, eliminates the requirement that a financing
statement be signed by the transferor, and instead requires that
the transferor authorize the filing in an "authenticated
record."
This change conforms the requirements of a financing statement
in the Civil Code to the requirements in the Commercial Code.
Under Sections 9502(a) and 9509(a) of the Commercial Code,
records filed with the office of the Secretary of State do not
require signatures for their effectiveness. Instead, a person
is entitled to file a financing statement if the debtor
AB 2667
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"authorizes the filing in an authenticated record."
The sponsor notes, "in Official Comment 3 to Section 9-502 of
the UCC, '�t]he elimination of the signature requirement
facilitates paperless filing.' As a result of this change to
the UCC, the form of National UCC Financing Statement (Form
UCC1), available on the California Secretary of State website
was revised so there is no longer a signature line for the
debtor. Since the UCC financing statement form no longer
provides a signature line for the debtor/transferor, parties
need to manually add a signature block for the transferor to
comply with Civil Code Section 3440.1(h)(1)."
This bill tracks the Commercial Code so that a financing
statement can be filed with the California Secretary of State
without a physical signature, as long as the transferor
authorized the filing in an authenticated record.
REGISTERED SUPPORT / OPPOSITION :
Support
Commercial Transaction Committee of the Business Law Section of
the State Bar (sponsor)
Opposition
None on file
Analysis Prepared by : Leora Gershenzon / JUD. / (916)
319-2334