The Uniform Commercial Code Conundrum
Trying to find accurate, complete, up-to-date information on a piece of collateral can be expensive, time-consuming and frustrating. Not knowing the history of your collateral places individuals and business entities at great financial risk. However, management of the UCC filing requirements is governed by a polarized system that is unreliable, difficult to access, and essentially broken. This invites fraud and misrepresentation, which costs all parties involved hundreds of millions of dollars each year.
The current UCC filing and management system is polarized for several reasons. First, we need to understand the entities that oversee and use UCC today. Each state or province has an office that monitors the UCC filing and record process. These offices are often considered cost centers and the revenue generated by their individual fees is important to the state’s or province’s public coffers. Therefore, their resources and department policies are focused on this primary goal of revenue generation.
In contrast, an individual or business entity that is filing a UCC on their collateral asset is looking to legally register and protect their ownership and legal interests. gFaxx provides not only easy-to-use UCC registration forms, but also the opportunity to research and confirm ownership prior to engaging in a business transaction.
Secondly, the state’s/province’s motivation to provide accessible and comprehensive information to individual/business entities is limited because they are not legally vested in the protection of an owner’s or buyer’s position on collateral assets. Often individual/business entities incur fees for multiple search inquiries and updated filings on a piece of collateral.
Third, the state/province has limited resources, and investing in the complex technology that would make the sharing of information more transparent and universal is not supported within their current budgets.