AR HB1463

Filing offices may refuse to file financing statements determined to be fraudulent under Arkansas Code § 4-9-520(e), with grounds for refusal added to § 4-9-516(b).

Filing officers must evaluate financing statements for seven specific fraud indicators, including unauthorized claims against government officials, mismatched secured parties and debtors, inmate filings without sworn statements, and language suggesting past fraudulent activity.

Filing officials who suspect fraud must report their reasoning to the Secretary of State's Business and Commercial Services Division director and general counsel; if both concur, certified notice is sent to the secured party with 30 days to provide documentation supporting the filing.

If the secured party fails to respond or provide sufficient evidence within 30 days, the filing office may refuse the financing statement, rendering it void with no legal effect on any named persons.

Regulated financial institutions, lenders in the loan and credit business, and persons regularly extending credit to agricultural producers are exempt from these fraudulent filing review requirements.