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North Dakota To Be Second State Requiring Electronic Lien Filing
BISMARCK, N.D. (4/24/13)--House Bill 1136, a bill in the North Dakota Legislature that would  require credit unions and others to file liens and security interests electronically, should become law by the end of the week, says the Credit Union Association of the Dakotas.

That means North Dakota will be the second state to mandate electronic lien filing. Colorado is the first. South Dakota also is primarily electronic, but that is not mandated, said Jeff Olson, CUAD vice president of advocacy and awareness (The Memo April 23).

HB 1136, which was supported by CUAD in both its original form and with approved amendments, has passed the House and Senate.  "Now that it has passed the Senate, the Senate president will sign, then it is back to the House for the speaker to sign, then to the governor," Olson told News Now. It "should be signed into law late this week," he said.

"We were at the table in the development of the proposed recommendations that were included in the final bill," Olson wrote in a legislative update in The Memo. "Credit unions and other financial institutions will also be included in the final development of the Central Indexing System (CIS) software development."

The bill makes three changes. It:

  • Mandates the electronic filing of all lien documents into the CIS, which would allow for the unlimited listing of collateral.
  • Reinstates the SSN/FIN as a unique identifier for searching for debtor information. North Dakota is one of two states that use both numbers. However, national paper lien forms don't require these numbers, which meant national forms would be rejected in North Dakota. Electronic lien filing would eliminate the national paper forms and the problem with the numbers, which are useful especially in agricultural liens.
  • Creates an upfront filing fee for the initial lien document and eliminates the fee for searching and retrieval of the document. The upfront fee eliminates more than 35 fees and subscription charges. Under the bill, those services will be available at no extra cost.
The bill's passage will allow the Secretary of State to develop one software program to accommodate the electronic filing of all lien documents, rather than developing a system to accommodate both paper and electronic filings, required under current law.  The bill has no fiscal impact because the agency already appropriated for the new system, said CUAD.

The bill moved quickly. This week the joint House and Senate Judiciary Committee concurred on proposed amendments. The House adopted the Conference Committee report Monday by a voice vote on the floor, with concurrences from the Senate floor Tuesday morning, 42-3.


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