MI SB1101

A debtor identified in a financing statement may file an affidavit with a filing office stating the financing statement is fraudulent, except for statements filed by regulated financial institutions or their representatives.

The Secretary of State must adopt a standardized form affidavit for reporting fraudulent financing statements, and filing offices must terminate fraudulent statements effective on the date the affidavit is filed.

Filing offices cannot charge a fee to file a fraud affidavit and cannot refund fees paid for the original financing statement, regardless of termination.

A financing statement filer may file a court action to reinstate a terminated statement if they believe it was legally filed and not fraudulent; if reinstated, the statement is effective from its original filing date and the filer must pay the debtor's costs and expenses.

Filing a materially false or fraudulent affidavit is a felony punishable by imprisonment up to 5 years, a $2,500 fine, or both; "regulated financial institution" includes banks, credit unions, insurance companies, and similar entities subject to state or federal regulatory oversight.