Can a register of deeds accept computer-printed UCC financing statement forms generated by a bank's PC software, instead of the traditional pre-printed carbon-paper forms?
Plain-English summary
The Forsyth County Register of Deeds asked the AG: when a bank prints UCC financing statements (UCC-1, UCC-3, and UCC-11 forms) from its own PC software instead of using the carbon-paper pre-printed forms that have been standard for decades, are those forms valid? Should the register of deeds accept them?
Chief Counsel John R. McArthur said yes. The Uniform Commercial Code at N.C.G.S. § 25-9-402 sets out what a financing statement must contain, not what physical format it must take. The required content is:
- Signature of the debtor and the secured party
- Name and address of the secured party from which information about the security interest can be obtained
- Name and mailing address of the debtor
- A statement indicating the types of collateral or describing the items
- For collateral involving crops, timber, minerals, or fixtures: a description of the real estate and the name of the record owner
If those elements are present, the financing statement complies with the UCC even if it has minor errors that are not seriously misleading (per the substantial-compliance rule in N.C.G.S. § 25-9-402(9)).
The Official Comment to § 25-9-402(1) explains that the UCC adopts a "notice filing" system. The filing is not the security agreement itself but a simple notice that puts third parties on inquiry. The Comment goes on to provide a model form which, "if substantially followed," complies with the financing statement requirements. The NC Supreme Court endorsed this substantial-compliance approach in Evans v. Everette, 279 N.C. 352, 183 S.E.2d 109 (1971).
The AG's office compared the bank's PC-generated forms to the model form and determined they satisfied the basic requirements. When properly filled in and signed, they should be accepted for filing by registers of deeds.
The opinion adds a useful note for practitioners. The UCC contemplates separate writings for the security agreement and the financing statement, but it does not prohibit combining them. N.C.G.S. § 25-9-402(1) explicitly provides that "a copy of the security agreement is sufficient as a financing statement" if it contains the required information and is signed by both parties. Conversely, a financing statement may also serve as the security agreement if it meets the substantive requirements of § 25-9-105(1)(h) and § 25-9-203(1)(b).
Currency note
This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The UCC underwent a major revision in 2001 (Revised Article 9), and North Carolina enacted Revised Article 9 effective July 1, 2001. The current statutory citations and exact filing-place rules have changed substantially. Most UCC filings are now centralized at the Secretary of State, and electronic filing is the dominant mode. The substantive principle that form is governed by content, not appearance, has carried forward, but the specific statute numbers in this opinion are outdated.
Background and statutory framework
Before electronic filing systems became universal, the typical secured-transactions practice in North Carolina used four-part carbon-paper UCC-1 forms. The secured party (typically a bank) typed the required information once and the carbon copies distributed to the debtor, the secured party, and one or two filing offices. As personal-computer software for loan processing improved in the early 1990s, banks began printing the forms directly from databases, eliminating the carbon and typewriter step. The PC-generated forms looked different (different fonts, different exact layouts), and registers of deeds sometimes hesitated to accept them.
The opinion's significance is that it forced registers of deeds to focus on substance, not form. The UCC has always been substance-over-form in this area. The notice-filing system is built on the premise that third parties looking at the public record need enough information to know that a security interest may exist and how to inquire further; the precise appearance of the form is irrelevant to that purpose.
The combined-document point in the opinion is also useful for practitioners. A short transaction can be documented with a single signed paper that functions as both the security agreement (substantively, between the parties) and the financing statement (procedurally, for perfection in the public record). That economy of paper is valid as long as the substantive requirements of each statute are met.
Common questions
What happens if a PC-generated form has minor formatting differences from the official form?
The UCC tolerates minor errors. N.C.G.S. § 25-9-402(9) provides that a financing statement "substantially complying with these requirements" is effective even with minor errors that are not seriously misleading. The substantial-compliance test asks whether a person searching the records would still find the filing and understand its content. Layout differences that do not impede search and understanding are not fatal.
Does this opinion mean a register of deeds must accept any document a bank submits?
No. The register's duty is to accept documents that comply with the statute. If a document is missing required content (no debtor name, no collateral description, no signature), the register can refuse it. The opinion specifically addresses computer-generated versions of correct forms, not improperly drafted documents.
Does the same logic apply to electronic submission today?
The principle yes; the specific procedures no. Revised Article 9 (2001) and subsequent NC legislation established electronic filing systems for UCC documents at the Secretary of State's office. Those systems have their own technical requirements. The substantial-compliance principle remains, but the filing process has migrated mostly online.
Source
Citations
- N.C.G.S. § 25-9-401
- N.C.G.S. § 25-9-402
- N.C.G.S. § 25-9-105(1)(h)
- N.C.G.S. § 25-9-203(1)(b)
- Evans v. Everette, 279 N.C. 352, 183 S.E.2d 109 (1971)
Original opinion text
October 30, 1995
Mr. John Holleman
Register of Deeds
Hall of Justice
PO Box 20639
Winston-Salem, NC 27120-0639
RE: Advisory Opinion, Acceptability of Computer-Generated Forms for UCC Filings; N.C.G.S. §§ 25-9-401-402
Dear Mr. Holleman:
You have asked our opinion whether certain computer generated forms (UCC-11 Financing Statement, UCC-3 Financing Statement Change, and UCC-11 Financing Statement Request for Information or Copies) are sufficient under N.C.G.S. § 25-9-402 and should be accepted for filing by Registers of Deeds in North Carolina.
You have received these forms from a financial institution which makes a substantial number of loans in Forsyth County and throughout the State of North Carolina and which has implemented a program to replace preprinted paper forms, traditionally used in loan transactions, with documents that are generated by a personal computer system ("PC Generated Forms"). Forms that have been replaced are UCC-1 Financing Statements, UCC-3 Financing Statement Change and UCC-11 Request for Information of Copies. These forms are currently carbon-paper forms in five parts, completion of which generally require entering the information by means of a typewriter. These PC Generated UCC Forms are substantially similar to the carbon-paper UCC Financing Statements that are currently in use. Currently, three copies of the standard carbon-paper forms are sent to the appropriate filing offices, with the creditor retaining the debtor copy and the secured party copy to be distributed. As a substitution therefore, three copies of the PC Generated UCC forms will be sent to each office where filing is required by the North Carolina Uniform Commercial Code, generally the Office of the Secretary of State and/or the Office of the Register of Deeds in the County where the collateral is located, or where the debtor is doing business.
Under current North Carolina law, in order to perfect a security interest from subsequently acquired rights of third parties, the secured party must file a financing statement in the county of the debtor's residence and, in the case of land on which crops are growing, or are to be grown, in the county where the land is located. N.C.G.S. § 25-9-401.
A financing statement is sufficient if it is signed by the debtor and the secured party, gives the name and an address of the secured party from which information concerning the security interest may be obtained, gives the name and a mailing address of the debtor, and contains a statement indicating the types, or describing the items, of collateral. When the financing statement covers crops growing or to be grown, or timber minerals or the like, or goods which are to become fixtures, the statement must also contain a description of the real estate concerned and the name of the record owner or record lessees thereof. If products of collateral are claimed, it must be so stated. N.C.G.S. § 25-9-402(1)(2) and (3). A financing statement substantially complying with these requirements is effective even though it contains minor errors which are not seriously misleading. N.C.G.S. § 25-9-402(9).
The Official Comment accompanying N.C.G.S. § 25-9-402(1) explains that this section adopts a system of notice filing: What is required to be filed is not, as under chattel mortgage and conditional sales acts, the security agreement itself, but only a simple notice which may be filed before the security interest attaches or thereafter. The notice itself indicates merely that the secured party who has filed may have a security interest in the collateral described. Further inquiry from the parties concerned will be necessary to disclose the complete state of affairs. Section 9-208 provides a statutory procedure under which the secured party, at the debtor's request, may be required to make disclosure.
The Official Comment accompanying N.C.G.S. § 25-9-402 sets out a form which, if substantially followed, will comply with the requirements for a financing statement. Evans v. Everette, 279 N.C. 352, 183 S.E.2d 109 (1971). We have compared the "PC Generated" financing statement forms with the financing statement form set out in N.C.G.S. § 25-9-402(3) and have determined that they satisfy the basic requirements of N.C.G.S. § 25-9-402(1). Accordingly, when properly filled in and executed, they should be accepted for filing by Registers of Deeds in North Carolina.
In addition, those using these forms should note that although the Code contemplates the execution of two separate writings, it does not prohibit the combination of a security agreement and financing statement. Although the financing statement need only be "a skeletonic statement" that the parties intend to engage in future transactions, which may never be consummated, N.C.G.S. § 25-9-402(1) specifically provides that "a copy of the security agreement is sufficient as a financing statement" if it contains the required information and is signed by both parties. A financing statement may also serve as a security agreement if it meets the requirements of N.C.G.S. § 25-9-105(1)(h) and N.C.G.S. § 25-9-203(1)(b). This is the consensus of both opinion writers and commentators on the Code. Evans v. Everette, supra.
John R. McArthur
Chief Counsel