SB 581

This bill prohibits the Department of Financial Institutions (DFI) from

recording in its corporate registration system any instrument containing an

individual's social security number (SSN). If DFI is presented with an instrument

containing an SSN, the bill allows DFI, prior to recording the instrument in the

system, to remove or obscure characters from the SSN so that it is not discernable

on the instrument. The bill also provides that, if DFI does not discover an SSN on

an instrument until after DFI has recorded the instrument in the system, DFI is not

liable for the instrument drafter's placement of the SSN on the instrument, and DFI

is allowed to remove or obscure characters from the SSN so that it is not discernable

on the instrument. In addition, if DFI records an instrument in the system

containing a complete SSN, the bill provides that the drafter of the instrument is

liable for actual damages resulting from the instrument being recorded.

The bill creates comparable provisions for records under the state's version of

Article 9 of the Uniform Commercial Code, which deals with secured transactions.

The bill prohibits an office in which financing statements are to be filed under Article

9, which is referred to as a "filing office" and which is, with certain exceptions, DFI,

from filing or indexing a record containing an individual's SSN. If a filing office is

presented with a record containing an SSN, the filing office may, prior to filing and

indexing, remove or obscure characters as described above. If a filing office discovers

an SSN on a record after filing and indexing, the filing office may also remove or

obscure characters, and the filing office is not liable for the record drafter's placement

of the SSN on the record. In addition, if a filing office files or indexes a record

containing a complete SSN, the drafter of the record is liable for actual damages

resulting from the record being filed and indexed. The bill also eliminates references

to SSNs on forms used for filing and amending financing statements.