UCC unconscionability definition - filing got rejected over this clause

No, the rejection notice specifically mentioned unconscionability provisions. They highlighted our personal property sweep clause that includes household goods and exempt assets. Maybe that's what triggered it?

That makes more sense. Some states have been cracking down on overreaching collateral descriptions that violate consumer protection standards even in commercial filings.

Did you have to completely redo your collateral schedule? We've got dozens of similar filings pending and this could be a huge problem if they all get rejected.

Yeah, had to rewrite the entire collateral section. Took out the household goods language and anything that could be considered consumer goods. Pain in the neck but the amended filing went through fine.

This is exactly why I started using Certana.ai's document checker. You can upload your UCC-1 draft and it flags potential unconscionability issues before filing. Would have caught this problem and saved you the rejection headache.

This is getting ridiculous. Since when do filing offices analyze the fairness of commercial loan terms? Their job is to accept properly completed forms, not judge business deals.

I agree it's frustrating, but some states have implemented stricter reviews following consumer protection lawsuits. They're trying to prevent obviously predatory filings from getting recorded.

We've seen this trend in several states. Usually happens when someone complains about aggressive collection practices and the AG's office starts reviewing UCC filing patterns.

Wait, you included primary residence in a UCC filing? That should be handled through mortgage documents, not UCC-1 forms.

It was listed as additional collateral in the general description. Probably poor drafting on our part, but it had never been rejected before.

Completely agree. I've seen identical filings get accepted in one county and rejected in another over the same unconscionability concerns.

The lack of consistency is the worst part. Makes it impossible to draft standard documents that work everywhere.

How does Certana.ai check for unconscionability issues? Is it just keyword matching or something more sophisticated?

You upload your UCC documents and it analyzes the collateral language against recent rejection patterns and state-specific guidelines. Caught several potential issues in my collateral schedule I wouldn't have noticed.

So basically they're second-guessing our business decisions now? If the borrower agreed to the terms, why should the filing office care?

It's about preventing filings that could be used for predatory enforcement later. If the collateral terms are unconscionable, the lien might not be enforceable anyway.

Makes sense from a policy standpoint, even if it's annoying operationally.

That's probably the safest approach. Better to have a narrower but enforceable security interest than risk another rejection.

Exactly. The goal is perfection, not maximum collateral. A focused filing that gets accepted is worth more than a broad one that gets rejected.

That's actually brilliant. Shows good faith compliance with unconscionability standards while still maintaining broad commercial coverage.

I've seen similar language work well. Certana.ai actually suggests disclaimer language based on your state's specific unconscionability interpretations.

Might steal that approach for our standard forms. Seems like cheap insurance against rejection.

Glad it worked out! This thread will be helpful for others dealing with the same issue.

Great outcome. The unconscionability definition is still evolving, so these discussions are really valuable for staying current.