Read the full stored bill text
89(R) SB 2221 - Enrolled version - Bill Text
S.B. No. 2221
AN ACT
relating to the filing of a fraudulent financing statement in
relation to certain secured transactions; authorizing the
imposition of a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 9.5185, Business & Commerce Code, is
amended to read as follows:
Sec. 9.5185. FRAUDULENT FILING. (a) A person may not
intentionally or knowingly present for filing or cause to be
presented for filing a financing statement that the person knows:
(1) is forged;
(2) contains a material false statement; or
(3) is groundless.
(b) A person who violates Subsection (a) is liable to
a
person injured by the violation
[
the owner of property covered by
the financing statement
] for:
(1) the greater of
$10,000
[
$5,000
] or the [
owner's
]
actual damages
caused by the violation
;
(2) court costs; and
(3) reasonable attorney's fees.
(c) A person who violates Subsection (a) also may be
prosecuted under Section 37.101, Penal Code.
(d) An owner of property covered by a fraudulent financing
statement described in Subsection (a) also may file suit in a court
of suitable jurisdiction requesting specific relief, including,
but not limited to, release of the fraudulent financing statement.
A successful plaintiff is entitled to reasonable attorney's fees
and costs of court assessed against the person who filed the
fraudulent financing statement. If the person who filed the
fraudulent financing statement cannot be located or is a fictitious
person, the owner of the property may serve the known or unknown
defendant through publication in a newspaper of general circulation
in the county in which the suit is brought.
(e)
A person identified as a debtor in a financing statement
that the person believes was not permitted to be filed under Section
9.509, 9.708, or 9.808, or was otherwise filed in violation of
Subsection (a), may, under penalty of perjury, file an affidavit
stating the impermissibility of the statement with the filing
office in which the statement was filed. The secretary of state
shall make available a form affidavit for use when filing an
affidavit with the secretary of state under this subsection. The
affiant shall file the affidavit together with proof of notice
required by Subsection (f).
The filing office shall reject an
affidavit filed under this subsection if:
(1) the affidavit is incomplete; or
(2)
the affiant did not file the affidavit together
with proof of notice required by Subsection (f).
(f)
A person who files an affidavit under Subsection (e)
shall send each secured party of record a written notice of the
person's intention to file the affidavit, together with a copy of
the financing statement.
The notice must contain the following
language at the beginning of the notice in at least 14-point
boldfaced type: "An affidavit will be filed under penalty of
perjury that the financing statement enclosed with this notice was
impermissible under Texas law.
Once the affidavit is accepted, a
termination statement will be filed with respect to the financing
statement.
The termination statement will be effective as of the
30th day after the date it is filed. If you were a regulated lending
institution, as defined by Section 9.5185(r), Business & Commerce
Code, on the date the financing statement was filed, you must notify
the filing office in which the financing statement was filed that
you qualify as a regulated lending institution not later than the
90th day after the date the termination statement is filed.
If you
believe that the financing statement was permitted to be filed
under Texas law, you must bring an action against the affiant not
later than the 90th day after the date on which the termination
statement is filed.
The action must be brought in the district
court in the county where the filing office in which the financing
statement was filed is located."
The notice must be sent to the
mailing address provided for each secured party of record in the
financing statement to which the affidavit relates by certified
mail, return receipt requested, not earlier than the 30th day
before and not later than the 5th day before the date the affidavit
is filed.
(g)
On acceptance of an affidavit properly filed under
Subsection (e), the filing office shall promptly file a termination
statement with respect to the financing statement identified in the
affidavit. The termination statement must indicate that the
statement was filed under this section. Except as provided by
Subsections (i) and (k), a termination statement filed under this
subsection shall be effective as of the 30th day after the date the
termination statement is filed.
(h)
A secured party of record identified in a financing
statement for which a termination statement has been filed under
Subsection (g) may bring an action against the person who filed the
affidavit under Subsection (e) seeking a determination of whether
the person who filed the financing statement was entitled to file
the financing statement. An action under this subsection shall
have priority on the court's calendar and shall proceed by
expedited hearing. The action must be brought in the district court
in the county where the filing office in which the financing
statement was filed is located. An action under this subsection
must be brought not later than the 90th day after the date on which
the termination statement is filed.
(i)
In an action brought under Subsection (h), a court may
order, in appropriate circumstances, preliminary relief, including
an order suspending the effectiveness of the termination statement
from taking effect or directing a party to take action to prevent
the termination statement from taking effect. If the court issues
an order under this subsection, and the filing office receives a
certified copy of the order:
(1)
the effectiveness of the termination statement is
immediately suspended as of the date the order is filed with the
filing office; and
(2)
the filing office shall promptly file an amendment
to the financing statement indicating that an order has suspended
the effectiveness of the termination statement.
(j)
If an order issued under Subsection (i) to suspend the
effectiveness of the termination statement ceases to be effective
due to a subsequent order or final judgment of a court, and the
filing office receives a certified copy of the subsequent order or
final judgment:
(1)
the termination statement shall immediately
become effective as of the date the order or judgment is filed with
the filing office; and
(2)
the filing office shall promptly file an amendment
to the financing statement indicating that the termination
statement is effective.
(k)
If a court determines in an action brought under
Subsection (h) that the financing statement was filed by a person
entitled to file the statement, and the filing office receives a
certified copy of the court's final judgment or order:
(1)
the termination statement shall immediately
become ineffective as of the date the order or judgment is filed
with the filing office; and
(2)
the filing office shall promptly file an amendment
to the financing statement indicating that the financing statement
has been reinstated.
(l)
A financing statement reinstated under Subsection (k)
or (q) is effective from the initial filing date and is considered
to have never been ineffective against all persons and for all
purposes except against a purchaser of the collateral described in
the financing statement who gave value in reliance on the
termination statement.
(m)
If the period of effectiveness of a financing statement
reinstated under Subsection (k) or (q) would have lapsed during the
period of termination, a secured party of record may file a
continuation statement not later than the 30th day after the
financing statement is reinstated, and the continuation statement
shall have the same effect as if it had been filed during the
six-month period prescribed by Section 9.515(d).
(n)
The filing office shall collect a fee for the filing of
an affidavit under Subsection (e) in an amount sufficient to
recover the cost of administering this section. The filing office
may not return a fee paid for filing a financing statement
identified in the affidavit, even if the financing statement is
subsequently reinstated.
(o)
The filing office or an employee of the filing office
may not be subject to liability for the termination or amendment of
a financing statement in the lawful performance of the duties of the
filing office under this section.
(p)
An affidavit filed under Subsection (e) is not effective
with respect to a financing statement filed by or on behalf of a
regulated lending institution.
(q)
A regulated lending institution must notify the filing
office that it qualifies as a regulated lending institution under
Subsection (p) not later than the 90th day after the filing of the
termination statement under Subsection (g). The secretary of state
may prescribe a form for use when notifying the secretary of state
under this subsection.
On timely receipt of a notice under this
subsection, the termination statement shall immediately become
ineffective, and the filing office shall promptly file an amendment
to the financing statement indicating that the financing statement
has been reinstated.
(r)
For purposes of this section, "regulated lending
institution" means an entity in the business of extending credit or
acquiring, purchasing, selling, brokering, or servicing loans or
other extensions of credit including a bank, savings bank, savings
association, trust company, building and loan association, savings
and loan association, credit union, consumer finance company,
industrial bank, industrial loan company, insurance company,
investment company, investment fund, installment seller, mortgage
company, sales finance company, or leasing company that:
(1)
is subject to licensure, regulatory oversight, or
examination by a state or federal agency; and
(2)
is operating as a regulated lending institution as
of the date on which a financing statement is filed.
SECTION 2. Section 9.510(c), Business & Commerce Code, is
amended to read as follows:
(c)
Except as otherwise provided by Section 9.5185(m), a
[
A
]
continuation statement that is not filed within the six-month
period prescribed by Section 9.515(d) is ineffective.
SECTION 3. Section 9.515(d), Business & Commerce Code, is
amended to read as follows:
(d)
Except as otherwise provided by Section 9.5185(m), a
[
A
]
continuation statement may be filed only within six months before
the expiration of the five-year period specified in Subsection (a)
or the 30-year period specified in Subsection (b), whichever is
applicable.
SECTION 4. This Act takes effect September 1, 2025.
______________________________
______________________________
President of the Senate
Speaker of the House
I hereby certify that S.B. No. 2221 passed the Senate on
May 8, 2025, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendment on May 30, 2025, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 2221 passed the House, with
amendment, on May 28, 2025, by the following vote: Yeas 129,
Nays 5, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor