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Properly Executed Assignment of Deposit Account

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Question: 
How important is it for a bank to get a properly executed Assignment of Deposit Account when securing a loan with a certificate of deposit or savings account? If there is a signed note and security agreement that includes language about the deposit account being taken as collateral does the bank have a perfected lien without an Assignment of Deposit Account? Or is this similar to a real estate secured loan where if you don't have a properly executed deed of trust regardless if the collateral property is listed in the note and security agreement you don't have a perfected lien? I am in the state of Tennessee.
Answer: 

We can't be specific as to state laws. For that we'd refer you to your state peers in a state forum in the BOL threads. Notices to deposit holders would be a state law issue and not under a federal regulation. Generally the deposits securing your loan will be with you and you have control. CDs under Article 9 of the UCC and deposited elsewhere differ, but those don't appear to be your question.

First published on 09/29/2014

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