Take Note: Louisiana Law Amended to Allow Use of Reproduced Images of Promissory Notes as Evidence in Executory Proceedings

La. R.S. 13:3733.1 addresses the situations in which the reproduction of an original record by a financial institution is deemed an "original," as that term is defined in Article 1001 of the Code of Evidence. In 2014, the Louisiana Legislature enacted Act No. 440, which amended this statute to allow financial institutions to use a reproduction of a promissory note when foreclosing on a mortgage loan through executory process.  The prior law, with limited exceptions, required banks to produce the original promissory note when foreclosing on a mortgage loan through executory process.  The recent amendment to this statute also expanded the definition of financial institution to specifically include mortgage and loan servicers.  See La. R.S. 13:3733.1(A).  Prior to the 2014 amendment, this statute was less clear with regards to whether it encompasses mortgage and loan servicers.  As a preliminary matter, we would like to note that financial institutions that use collateral mortgages should continue to retain the original collateral mortgage note because the new provisions authorizing the use of reproduced images do not extend to collateral mortgage notes.  See La. R.S. 13:3733.1(K).

Yet, while Act No. 440 allows financial institutions to use reproductions of promissory notes when foreclosing on a mortgage loan through executory process, the ability to do so is not without restriction.  If a financial institution uses a reproduced image, it is required to provide enhanced certifications when using a reproduction of a document.  The prior version of La. R.S. 13:3733.1(E) required a financial institution to certify that the reproduced document was a true and correct reproduction of the original, and that the reproduction was made from the records maintained by the financial institution in the course of its business activities.  The amended version of La. R.S. 13:3733.1(E) also requires that the financial institution certify that it is entitled to enforce the obligation evidenced by the document.

Further, Act No. 440 amended Louisiana Code of Civil Procedure article 2636 to specifically provide that documents recognized as authentic under La. R.S. 13:2733.1 are also deemed authentic for purposes of executory process.  See La. C.C.P. art. 2636(8).  La. C.C.P. art. 2637(C) was also amended and now provides that if the mortgage sought to be enforced is a collateral mortgage, or if the conventional mortgage or security agreement to be enforced secures multiple or future indebtedness of the debtor, the existence of the actual indebtedness may be proved by the verified original or supplemental petition, or by an affidavit submitted with the original or supplemental petition.  Use of a reproduction of the original note, bond, handnote, or other evidence representing the actual indebtedness requires certification by an appropriate representative of the financial institution, in accordance with La. R.S. 13:3733.1(E).

If you have any questions regarding compliance with La. R.S. 13:3733.1, as amended, or otherwise have any other questions pertaining to banking law, please do not hesitate to contact us.

 Author: Julie M. McCall  Practice Area: Banking Law  Date: May 1, 2015

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