Lambert Bill’s Affidavit Shortcut Can’t Touch Bank Filings

The text as introduced · 1,434 words

89R7736 SRA-F

By: Lambert
H.B. No. 5377

A BILL TO BE ENTITLED

AN ACT

relating to the filing of a fraudulent financing statement in

relation to certain secured transactions; authorizing the

imposition of a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 9.5185, Business & Commerce Code, is

amended to read as follows:

Sec. 9.5185. FRAUDULENT FILING. (a) A person may not

intentionally or knowingly present for filing or cause to be

presented for filing a financing statement that the person knows:

(1) is forged;

(2) contains a material false statement; or

(3) is groundless.

(b) A person who violates Subsection (a) is liable to a

person injured by the violation [ the owner of property covered by

the financing statement ] for:

(1) the greater of $10,000 [ $5,000 ] or the [ owner's ]

actual damages caused by the violation ;

(2) court costs; and

(3) reasonable attorney's fees.

(c) A person who violates Subsection (a) also may be

prosecuted under Section 37.101, Penal Code.

(d) An owner of property covered by a fraudulent financing

statement described in Subsection (a) also may file suit in a court

of suitable jurisdiction requesting specific relief, including,

but not limited to, release of the fraudulent financing statement.

A successful plaintiff is entitled to reasonable attorney's fees

and costs of court assessed against the person who filed the

fraudulent financing statement. If the person who filed the

fraudulent financing statement cannot be located or is a fictitious

person, the owner of the property may serve the known or unknown

defendant through publication in a newspaper of general circulation

in the county in which the suit is brought.

(e) A person identified as a debtor in a financing statement

that the person believes was not permitted to be filed under Section

9.509, 9.708, or 9.808, or was otherwise filed in violation of

Subsection (a), may, under penalty of perjury, file an affidavit

stating the impermissibility of the statement with the filing

office in which the statement was filed. The secretary of state

shall make available a form affidavit for use under this

subsection. The filing office shall reject an affidavit filed

under this subsection if:

(1) the affidavit is incomplete;

(2) the affidavit is prohibited under Subsection (q);

or

(3) the filing office believes in good faith that the

affidavit was filed:

(A) without a reasonable basis; or

(B) with the intent to harass or defraud.

(f) On receipt of an affidavit filed under Subsection (e),

the filing office shall promptly file a termination statement with

respect to the financing statement identified in the affidavit.

The termination statement must indicate that the statement was

filed under this section. Except as provided by Subsections (i) and

(k), a termination statement filed under this subsection shall be

effective until the 30th day after the date the statement is filed.

(g) On the same day that the filing office files a

termination statement under Subsection (f), the office shall send

to each secured party of record identified in the financing

statement a notice that the termination statement has been filed.

The notice shall be sent by certified mail, return receipt

requested, to the mailing address provided for the secured party of

record in the financing statement.

(h) A secured party of record identified in a financing

statement for which a termination statement has been filed under

Subsection (f) may bring an action against the person who filed the

affidavit under Subsection (e) seeking a determination of whether

the person who filed the financing statement was entitled to file

the statement. An action under this subsection shall have priority

on the court's calendar and shall proceed by expedited hearing. The

action shall be brought in the district court in the county where

the filing office in which the financing statement was filed is

located. An action under this subsection must be filed not later

than the 60th day after the date on which the termination statement

becomes effective.

(i) In an action brought under Subsection (h), a court may

order, in appropriate circumstances, preliminary relief, including

an order preventing the termination statement from taking effect or

directing a party to take action to prevent the termination

statement from taking effect. If the court issues an order under

this subsection, and the filing office receives a certified copy of

the order before the termination statement takes effect:

(1) the termination statement may not take effect; and

(2) the filing office shall promptly file an amendment

to the financing statement indicating that an order has prevented

the termination statement from taking effect.

(j) If an order issued under Subsection (i) to prevent the

termination statement from taking effect ceases to be effective due

to a subsequent order or final judgment of a court, and the filing

office receives a certified copy of the subsequent order or final

judgment:

(1) the termination statement shall immediately

become effective on receipt of the certified copy by the filing

office; and

(2) the filing office shall promptly file an amendment

to the financing statement indicating that the termination

statement is effective.

(k) If a court determines in an action brought under

Subsection (h) that the financing statement was filed by a person

entitled to file the statement, and the filing office receives a

certified copy of the court's final judgment or order before the

termination statement takes effect:

(1) the termination statement may not take effect; and

(2) the filing office shall promptly remove the

termination statement and any amendments filed under Subsection (i)

from its public records.

(l) If a court determines in an action brought under

Subsection (h) that the financing statement was filed by a person

entitled to file the statement, and the filing office receives a

certified copy of the court's final judgment or order after the

termination statement takes effect, the filing office shall

promptly file an amendment to the financing statement indicating

that the financing statement has been reinstated.

(m) A financing statement reinstated under Subsection (l)

is effective from the initial filing date and is considered to have

never been ineffective against all persons and for all purposes

except against a purchaser of the collateral described in the

financing statement who gave value in reliance on the termination

statement.

(n) If the period of effectiveness of a financing statement

reinstated under Subsection (l) would have lapsed during the period

of termination, the secured party of record may file a continuation

statement not later than the 30th day after the financing statement

is reinstated, and the continuation statement shall have the same

effect as if it had been filed during the six-month period

prescribed by Section 9.515(d).

(o) The filing office shall collect a fee for the filing of

an affidavit under Subsection (e) in an amount sufficient to

recover the cost of administering this section. The filing office

may not return a fee paid for filing a financing statement

identified in the affidavit, even if the financing statement is

subsequently reinstated.

(p) The filing office or an employee of the filing office

may not be subject to liability for the termination or amendment of

a financing statement in the lawful performance of the duties of the

filing office under this section.

(q) An affidavit may not be filed under Subsection (e) with

respect to a financing statement filed by or on behalf of a

regulated lending institution. For purposes of this subsection,

"regulated lending institution" means an entity in the business of

extending credit or acquiring, purchasing, selling, brokering, or

servicing loans or other extensions of credit that is subject to

licensure, regulatory oversight, or examination by a state or

federal agency and includes banks, savings banks, savings

associations, trust companies, building and loan associations,

savings and loan associations, credit unions, consumer finance

companies, industrial banks, industrial loan companies, insurance

companies, investment companies, investment funds, installment

sellers, mortgage companies, sales finance companies, and leasing

companies.

SECTION 2. Section 9.510(c), Business & Commerce Code, is

amended to read as follows:

(c) Except as otherwise provided by Section 9.5185(n), a [ A ]

continuation statement that is not filed within the six-month

period prescribed by Section 9.515(d) is ineffective.

SECTION 3. Section 9.515(d), Business & Commerce Code, is

amended to read as follows:

(d) Except as otherwise provided by Section 9.5185(n), a [ A ]

continuation statement may be filed only within six months before

the expiration of the five-year period specified in Subsection (a)

or the 30-year period specified in Subsection (b), whichever is

applicable.

SECTION 4. This Act takes effect September 1, 2025.