A prior post addressed a proposed amendment to Article 9's official comments stating that the date of an Article 9 filing relates back to the initial filing date even if the debtor did NOT authorize the filing at that time. This post returns to that topic for two reasons. First, although it is risky to generalize, I sense that bankruptcy judges may still be unaware of this proposed amendment. This is relevant because bankruptcy judges often are on the "front lines" of Article 9 interpretation. Second, I have heard, indirectly, that at least some people want this amendment to lend approval to some lenders' current practice to routinely file without authorization during the loan application process. In other words, the loan is likely to be given within a few days, so no harm no foul. Maybe I misheard or misunderstood?
Article 9 does contemplate and even endorses "pre-filing," (filing a financing statement before the loan is approved). Absent exceptions not relevant here, however, Article 9 expressly conditions a lender's authority to file a financing statement against a debtor on getting that debtor's authorization for the filing in an authenticated record – whether in an elaborate loan application or scrawled on a napkin. This may well be one of the clearest parts of Article 9. Whatever one's views of the merits, a comment cannot trump this statutory requirement that reserves to the debtor some control over the clouding of title to his/her/its property.
As suggested by one of the commentators in response to my last post, eliminating debtor signatures from financing statements sure did open a can of worms. Moving to medium neutrality is one thing. Rendering debtor authorization optional is something different entirely.