If the bank wants to have priority in its loan to the pottery store, how should the bank perfect its interest?

A) The interest is perfected automatically because the collateral are goods.
B) The bank would have to file a financing statement for all items.
C) The bank would have to make a notation on the certificate of title for the van and would have to file a financing statement on the other items.
D) The bank could make a notation on the certificate of title for the van and on the ownership documents of the other items because they are goods used to conduct business.
E) The bank would have to make a notation on the certificate of title for the van, but the other items would be perfected automatically.

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Kenneth Nalvarte · Accepted Answer

Final Answer : C, Explanation :  To perfect its interest and ensure priority over other creditors, the bank must take specific actions based on the type of collateral. For the delivery van, which likely has a certificate of title, the bank needs to make a notation on that certificate. For the other items like kilns and pottery wheels, which do not have titles, filing a financing statement is the appropriate method of perfection. This approach ensures the bank's security interest is publicly recorded and has priority over subsequent claims.

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