The bill amends the Business & Commerce Code to address the filing of fraudulent financing statements in secured transactions. It prohibits individuals from knowingly presenting or causing to be presented a financing statement that is forged, contains false statements, or is groundless. Violators are liable to any injured party for damages, court costs, and attorney's fees, with the minimum damage amount increased from $5,000 to $10,000. Additionally, the bill allows property owners affected by fraudulent filings to seek specific relief through the courts, including the release of the fraudulent statement.

New provisions are introduced that enable individuals identified as debtors in questionable financing statements to file an affidavit asserting the impermissibility of the statement. The filing office is required to reject incomplete affidavits or those filed with malicious intent. Upon receipt of a valid affidavit, the filing office must file a termination statement and notify secured parties of record. The bill also establishes a fee for filing affidavits and clarifies that the filing office and its employees are not liable for actions taken under this section. The act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Commerce Code 9.5185, Commerce Code 9.510, Commerce Code 9.515 (Commerce Code 9)