AB 1858, as amended, Perea. Commercial law: secured transactions.
The Uniform Commercial Code - Secured Transactions governs security interests in collateral, including personal property and fixtures, as well as certain sales of accounts, contract rights, and chattel paper. That code, among other things, specifies requirements and procedures regarding perfecting a security interest, including the filing of a financing statement with the Secretary of State. Existing law specifies that a financing statement sufficiently provides the name of a debtor, where the debtor is an individual, if it provides the individual name of the debtor or the surname and first personal name of the debtor.
This bill would revise the manner in which a financing statement sufficiently provides the name of the debtor, where that debtor is an individual, to provide that, where the Department of Motor Vehicles has issued a driver’s license that has not expired or identification card that has not expired to the individual, the statement sufficiently provides the name of the debtor only if the statement provides the name of the individual indicated on the license or card and, if the individual has not been issued a driver’s license or identification card, the statement sufficiently provides the name of the debtor if it provides the individual name of the debtor or the surname and first personal name of the debtor.
Existing provisions of the Unruh Civil Rights Act, with certain exceptions, prohibit various forms of arbitrary discrimination by business establishments.
This bill would make it a violation of the Unruh Civil Rights Act for a secured party or proposed secured party to decline to provide credit to a debtor or proposed debtor, or offer to make the terms and conditions of such credit less favorable to the debtor or proposed debtor,begin delete because the debtor or proposed debtor does not hold or present a valid driver’s license or identification card issued by the Department of Motor Vehicles, as provided.end deletebegin insert
if that decision was based on the fact that the debtor’s name to be included on the financing statement is or would be that provided by a debtor to whom the Department of Motor Vehicles has not issued a driver’s license that has not expired or an identification card that has not expired and all elements that would be required to establish a claim for violation of the Unruh Civil Rights Act are established. end insert
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 9503 of the Commercial Code, as
2amended by Section 16 of Chapter 531 of the Statutes of 2013, is
3amended to read:
(a) A financing statement sufficiently provides the name
5of the debtor only if it does so in accordance with the following
6rules:
7(1) Except as otherwise provided in paragraph (3), if the debtor
8is a registered organization or the collateral is held in a trust that
9is a registered organization, only if the financing statement provides
10the name that is stated to be the registered organization’s name on
11the public organic record most recently filed with or issued or
12enacted by the registered organization’s jurisdiction of organization
13which purports to state, amend, or restate the registered
14organization’s name.
15(2) Subject to
subdivision (f), if the collateral is being
16administered by the personal representative of a decedent, only if
17the financing statement provides, as the name of the debtor, the
P3 1name of the decedent and, in a separate part of the financing
2statement, indicates that the collateral is being administered by a
3personal representative.
4(3) If the collateral is held in a trust that is not a registered
5organization, only if the financing statement satisfies both of the
6following conditions:
7(A) Provides, as the name of the debtor, either of the following:
8(i) If the organic record of the trust specifies a name for the
9trust, the name specified.
10(ii) If the organic
record of the trust does not specify a name
11for the trust, the name of the settlor or testator.
12(B) In a separate part of the financing statement, the following
13information is provided, as applicable:
14(i) If the name is provided in accordance with clause (i) of
15subparagraph (A), the financing statement indicates that the
16collateral is held in a trust.
17(ii) If the name is provided in accordance with clause (ii) of
18subparagraph (A), the financing statement provides additional
19information sufficient to distinguish the trust from other trusts
20having one or more of the same settlors or the same testator and
21indicates that the collateral is held in a trust, unless the additional
22information so indicates.
23(4) Subject to subdivision (g), if the debtor is an individual to
24whom the Department of Motor Vehicles has issued a driver’s
25license that has not expired or an identification card that has not
26expired, only if the financing statement provides the name of the
27individual indicated on that driver’s license or identification card.
28(5) If debtor is an individual to whom paragraph (4) does not
29apply, only if the financing statement provides the individual name
30of the debtor or the surname and first personal name of the debtor.
31(6) In other cases, according to the following rules:
32(A) If the debtor has a name, only if the financing statement
33provides the organizational name
of the debtor.
34(B) If the debtor does not have a name, only if the financing
35statement provides the names of the partners, members, associates,
36or other persons comprising the debtor, in a manner that each name
37provided would be sufficient if the person named were the debtor.
38(7) Subject to the last sentence of this paragraph, it is a violation
39of Section 51 of the Civil Code for a secured party or proposed
40secured party to decline to provide credit to a debtor or proposed
P4 1debtor, or offer to make the terms and conditions of the credit less
2favorable to the debtor or proposed debtor if (A) that decision was
3based on the fact that the debtor’s name to be included on the
4financing statement is or would be that provided under paragraph
5(5) rather than under paragraph
(4), and (B) all elements that
6would be required to establish a claim for violation of Section 51
7(including any elements relating to motivation or state of mind)
8are established. Any affirmative defenses that would be available
9to a claim under Section 51 would be affirmative defenses to a
10claim under this paragraph.
11(b) A financing statement that provides the name of the debtor
12in accordance with subdivision (a) is not rendered ineffective by
13the absence of either of the following:
14(1) A trade name or other name of the debtor.
15(2) Unless required under subparagraph (B) of paragraph (6) of
16subdivision (a), names of partners, members, associates, or other
17persons comprising the debtor.
18(c) A financing statement that provides only the debtor’s trade
19name does not sufficiently provide the name of the debtor.
20(d) Failure to indicate the representative capacity of a secured
21party or representative of a secured party does not affect the
22sufficiency of a financing statement.
23(e) A financing statement may provide the name of more than
24one debtor and the name of more than one secured party.
25(f) The name of the decedent indicated on the order appointing
26the personal representative of the decedent issued by the court
27having jurisdiction over the collateral is sufficient as the “name
28of the decedent” under paragraph (2) of subdivision (a).
29(g) If
the Department of Motor Vehicles has issued to an
30individual more than one driver’s licenses or identification cards
31of a kind described in paragraph (4) of subdivision (a), paragraph
32(4) of subdivision (a) refers to the most recently issued license or
33card.
34(h) For purposes of this section:
35(1) “Driver’s license” includes a driver’s license issued pursuant
36to subdivision (a) of Section 12801.9 of the Vehicle Code.
37(2) “Name of the settlor or testator” means either of the
38following:
39(A) If the settlor is a registered organization, the name that is
40stated to be the settlor’s name on the public organic record most
P5 1recently filed with or issued or enacted by the
settlor’s jurisdiction
2of organization which purports to state, amend, or restate the
3settlor’s name.
4(B) In other cases, the name of the settlor or testator indicated
5in the trust’s organic record.
Section 9503.5 is added to the Commercial Code, to
7read:
Section 51 of the Civil Code shall be construed to
9prohibit a secured party or proposed secured party from declining
10to provide credit to a debtor or proposed debtor, or offer to make
11the terms and conditions of such credit less favorable to the debtor
12or proposed debtor, because the debtor or proposed debtor does
13not hold or present a valid driver’s license or identification card
14issued by the Department of Motor Vehicles. All elements of a
15claim under Section 51 of the Civil Code and any affirmative
16defenses available under Section 51 of the Civil Code apply to a
17claim under this section.
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