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Evergreen Ledger

SHB 2640

In Committee

House

Unauthorized UCC filings

Concerning unauthorized Uniform Commercial Code filings.

This status may be delayed. See Action History below for the latest updates.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 8, 2026
Last Action: February 9, 2026
Status: H Rules R
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AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesPeople-leaningCorporate & Wealthy Interests

This bill makes it a crime to file unauthorized or fraudulent Uniform Commercial Code (UCC) financing statements and creates a new process for debtors to quickly remove such filings. It also gives secured parties a path to challenge removal of their filings through administrative review or court action.

  • Makes it a gross misdemeanor (or class C felony for repeat offenses) to file a Uniform Commercial Code (UCC) financing statement without authorization, without a legitimate transaction basis, or with intent to harass or defraud the debtor.
  • Allows individuals named as debtors in unauthorized financing statements to file a notarized affidavit with the Department of Licensing to request immediate termination of the statement.
  • Requires the Department of Licensing to file a termination statement within 30 days of receiving a valid affidavit—unless the secured party challenges it through an expedited administrative review or court action.
  • Permits secured parties to request an expedited administrative review or file a court action to reinstate a financing statement they believe was properly filed.
  • Clarifies when the Department of Licensing may refuse to accept a financing statement—including if it reasonably believes the filing was made to harass or defraud, though the office is not required to investigate intent.
  • Prohibits the Department of Licensing from charging fees for affidavit or termination statement filings, and bars refunds of original filing fees—even if the financing statement is later reinstated.

Who is affected

  • Individuals or businesses incorrectly named as debtors in unauthorized financing statements — People who are incorrectly listed as debtors in financing statements filed without authorization and with harmful intent (e.g., to harass or defraud) can now use a new process to quickly clear their records.
  • Secured parties (such as banks, credit unions, or lenders) — Secured parties (e.g., lenders, creditors) who file financing statements may face new liability if they file them without proper authorization or with intent to harass or defraud, and may need to go to court to reinstate a financing statement if challenged.
  • Trusted filers (e.g., financial institutions or title companies that file UCC records in bulk) — Entities that regularly file financing statements in bulk (e.g., title companies, financial service providers) must ensure their filings are authorized and may be subject to expedited review if challenged.
  • Department of Licensing (DOL) — The Department of Licensing, as the state’s UCC filing office, must implement new procedures—including accepting affidavits, issuing termination statements, conducting reviews, and notifying parties—without charging fees for these services.
Effective: July 28, 2026Fiscal impact: The Department of Licensing will incur costs to implement new processes (e.g., accepting affidavits, conducting reviews, issuing termination statements), but no fees will be charged for these services. The bill does not specify new funding, so costs are likely to come from existing DOL budgets.
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026 at 8:11 PM

Pro/Con Analysis

Potential Benefits (5)

  • The bill creates a streamlined, no-fee administrative process for individuals to challenge unauthorized UCC filings by submitting a notarized affidavit—addressing a known abuse where malicious actors file false financing statements to harass, embarrass, or impair the creditworthiness of individuals and small businesses.

    Rights & LibertiesPeopleRef: Sec. 3(b), Sec. 3(c)

  • The bill provides for recovery of costs and attorneys’ fees from secured parties who bring unsuccessful reinstatement actions—creating a meaningful deterrent against frivolous or retaliatory litigation by creditors or collection agencies against debtors who successfully challenge fraudulent filings.

    Rights & LibertiesPeopleRef: Sec. 3(j)

  • By criminalizing unauthorized, fraudulent, or harassing UCC filings, the bill addresses a harmful tactic used by bad actors (e.g., 'sovereign citizen' movants, disgruntled ex-employees, or predatory lenders) to weaponize public records and disrupt the financial lives of individuals and small businesses.

    Public SafetyPeopleRef: Sec. 1(1)

  • The bill provides secured parties (e.g., banks, credit unions) with a clear, expedited path to reinstate financing statements through court action—preserving due process rights for legitimate lenders while ensuring debtors have a fair opportunity to contest improper filings.

    Business & EmploymentPeopleRef: Sec. 3(f)(2)

  • The bill clarifies procedures for trusted filers (e.g., title companies, financial institutions), which may reduce administrative errors and improve efficiency in bulk UCC filings—benefiting small lenders and title agencies that rely on predictable, standardized filing processes.

    Business & EmploymentPeopleRef: Sec. 3(k)
Potential Concerns (5)

  • The bill creates a new administrative process allowing individuals to request termination of UCC filings via notarized affidavit, but the Department of Licensing may reject affidavits it believes were submitted with intent to harass or defraud—without requiring investigation or proof of intent. This gives the state discretion to deny relief based on subjective belief, potentially denying due process to legitimate debtors.

    Rights & LibertiesPeopleRef: Sec. 1(1)(c), Sec. 3(b), Sec. 3(k)

  • The bill prohibits the Department of Licensing from charging fees for affidavits or termination statements, and bars refunds of original filing fees—even if a financing statement is later reinstated. This shifts administrative costs entirely to the state budget while preserving revenue for secured parties who may have filed improperly but are not penalized financially for the filing itself.

    FinancialPeopleRef: Sec. 3(d)

  • The expedited administrative review process for trusted filers (e.g., financial institutions) may create unequal access to justice: individuals must navigate a 30-day waiting period before termination takes effect, while trusted filers can trigger an immediate termination if the DOL finds fraudulent intent—potentially exposing debtors to rapid, unreviewable loss of property rights before they can respond.

    Public SafetyPeopleRef: Sec. 3(k)

  • While the bill criminalizes fraudulent UCC filings as gross misdemeanors (or class C felonies for repeat offenses), it does not allocate additional law enforcement or prosecutorial resources to investigate or pursue such cases—making enforcement reliant on victims self-reporting and persuading local prosecutors, which disproportionately burdens low-income and marginalized individuals with limited legal access.

    Public SafetyPeopleRef: Sec. 1(2), Sec. 1(3)

  • The bill allows the Department of Licensing to refuse to accept a financing statement if it 'reasonably believes' it was filed to harass or defraud—but explicitly states the office has 'no duty to investigate or ascertain facts relevant to whether such intent was present.' This creates a risk of arbitrary rejection based on subjective or incomplete information, potentially disrupting legitimate credit access for small businesses and sole proprietors who rely on timely UCC filings to secure loans.

    Business & EmploymentPeopleRef: Sec. 4(b)(8)

Who Is Most Affected

Individuals targeted by fraudulent UCC filingsPositive Impact

Individuals targeted by fraudulent UCC filings gain a low-barrier, no-cost mechanism to clear their records quickly—addressing a serious abuse that can damage credit, impede housing applications, and cause emotional distress. However, they must navigate a 30-day waiting period and may face retaliatory lawsuits.

Small lenders and credit unionsMixed Impact

Small lenders and credit unions benefit from a clearer path to enforce legitimate security interests, but may face increased liability if filings are deemed unauthorized—even in good faith—and may incur legal costs if challenged. The no-fee policy shifts compliance burdens onto them without compensation.

Large financial institutions and title companiesMixed Impact

Large financial institutions and title companies (trusted filers) benefit from procedural clarity and expedited review for batch filings, but may face reputational or legal risk if their systems produce unauthorized filings. They are better positioned than individuals to absorb legal costs and navigate administrative reviews.

Department of LicensingNegative Impact

The Department of Licensing faces new operational responsibilities (affidavit intake, reviews, notices, court coordination) without additional funding—straining existing budgets. Staff may lack training or resources to assess intent, increasing risk of arbitrary decisions or legal liability.

Law enforcement and prosecutorial agenciesNegative Impact

Law enforcement and prosecutors gain a new criminal statute but no new resources to investigate or prosecute fraudulent filings—making enforcement highly discretionary and uneven across jurisdictions, especially in rural or underfunded counties.