Consumer loan taking on us CD as collateral. How to perfect our position - possession of CD or filing with the state.

Admittedly I have not studied RA9, but it is my understanding that possession is required in this instance.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Was a double post.

[This message has been edited by Andy Z (edited 08-11-2001).]

UCC-9 does not apply to this situation (nor to any consumer purpose deposit secured transaction). This doesn't mean that the lien cannot be perfected, it just means that perfection is not specified under the UCC. It becomes a matter of state statutory and case law. I'd suggest you contact your bank counsel and request information about consumer deposit account lien perfection.

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Jim Bedsole, CRCM, CBA, CFSA

Opinions expressed are my own, and do not necessarily reflect those of my employer.

In the past (pre RA9), it was recommended to us by counsel that CD secured loans have a UCC filed on them.

My point, made more clearly by Jim, is that possession is required and a UCC is not required for filing.

If you are in a state still under the old rules, a UCC could be necessary.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

[This message has been edited by Andy Z (edited 08-13-2001).]

A big problem under Article 9 is figuring out whether a "CD" is an instrument, a general intangible, or a deposit account which is perfected by filing, possession or control. Some depository institutions issue CDs, others provide what amount to a time deposit account agreement. Either have counsel determine the correct category or perfect every way possible.

You may want to review your Deposit or CD Agreement(s) on that issue. As ours addresses this issue as the bank must approve this actionas it abides by State UCC.