REVISED UCC ARTICLE 9

Question 1

“Strict Foreclosure” is a procedure that allows a secured party to acquire the debtor’s interest in collateral through litigation.
True OR False

Answer 1

False. Strict Foreclosure is a procedure that allows a secured party to acquire the debtor’s interest in collateral without the need for a sale or other disposition.

Question 2

Financing statements for most types of collateral expire after five years. What can a credit union do to keep their security interest in effect until the loan is paid in full?

Answer 2

The credit union can continue to file continuation statements within six months of the expiration dates until the loan is paid in full.

Question 3

In general, which lender has priority rights to collateral used to secure a loan?

Answer 3

The first secured lender to file a financing statement.

Question 4

When a loan secured by consumer goods such as furniture is paid in full, what is the credit union required to file and when must it be filed?

Answer 4

The credit union must file a termination statement within one month after the
loan is paid in full or within 20 days of receiving a request from the borrower if
that request is received within that one-month time period.

Question 5

UCC 9 requires credit unions to provide three notices to borrowers. Match the notices below with the correct definition.
-Notice of Sale
-Calculation of Deficiency
-Notice of Accounting
a. Informs the member of the balance of the loan after
the proceeds from a sale or other disposition have
been applied to that loan
b. A notice listing the amount of the unpaid loan
balance and the identity of the collateral securing
the loan.
c. Provides the member with detailed information on
the upcoming sale of the loan collateral from being
disposed of.

Answer 5

Notice of Sale — c
Notice of Calculation of Deficiency — a
Notice of Accounting — b