I was just advised from another FDIC regulated bank that they are being cited for taking blanket UCC filings on commercial real estate loans and not requiring flood insurance on the contents. Has this been a problem for other banks?

The examiners are saying that the language in the security agreement is too broad and that the bank must release the UCC filing; amend it to delete contents; or obtain flood insurance on the contents.

Such blanket liens cover contents. If you have the building and contents, it triggers content coverage requirements.

Problem - you betcha. A new problem - not hardly - banks have been cited for this for a long time.

Agreed. The examiners are right. The bank should have realized that a blanket UCC covers contents. Basic UCC issue.

Let me add that the UCC language is not too broad. That is standard language; the bank just failed to connect the dots.

I remember years ago when I was a loan processor for a small bank we took blanket filings too. I just finished a conversation with our Note Manager and evidently we don't do it here, so I'm relieved.

Lucky! It is pretty common.