Asked by Vansh Arora on May 17, 2024
Verified
Which of the following is a means of obtaining control over the collateral?
A) The secured party becomes the bank's customer for the deposit account.
B) The debtor is the bank with which the deposit is maintained.
C) The bank has agreed to comply with the debtor's instructions regarding the funds in the account.
D) The debtor becomes the bank's customer for the deposit account.
Obtaining Control
The act of gaining the power or authority to manage or direct something or someone.
Collateral
Assets pledged by a borrower to secure a loan or credit, which the lender may seize if the borrower fails to repay the loan.
Deposit Account
A bank account that holds deposited funds, such as a savings or checking account, allowing for the deposit and withdrawal of money.
- Elucidate the approaches used in perfecting a security interest, focusing on possession and the process of public filings, and their respective effects.
Verified Answer
SR
Steven ReinigMay 19, 2024
Final Answer :
A
Explanation :
A secured party can provide a form of public notice by controlling the collateral [UCC 9-314].Control is the only perfection method if the collateral is a deposit account [UCC 9-312(b) (1)].One of the ways a secured party obtains control is by becoming the bank's customer for the deposit account.
Learning Objectives
- Elucidate the approaches used in perfecting a security interest, focusing on possession and the process of public filings, and their respective effects.