When a bank agrees to enter into a loan with a bank customer, the bank will most likely acquire a security interest in property owned or purchased by the customer. This transaction, called a secured transaction, governed by Article 9 of the Uniform Commercial Code. Article 9 was substantially revised in 2000, and the vast majority of states have now adopted the revised version. The security interest provides protection for the bank in case the customer fails to pay a debt owed to the bank, even if the customer enters into bankruptcy. A number of steps must be followed for the bank to “perfect” the security interest, including the filing of documents with the secretary of state or other appropriate officer in the state where the customer resides.

Find a legal form in minutes
Browse US Legal Forms’ largest database of 85k state and industry-specific legal forms.