Article 9 of the Nebraska Uniform Commercial Code (UCC) contains the body of law governing secured transactions in Nebraska. It applies to consensual security interests in personal property and fixtures and statutory, non-possessory agricultural liens, but does not cover real estate liens.
The Secured Transactions section of the NBA Compliance Handbook has been significantly revised in 2001 due to passage of Revised Article 9 by the Nebraska Legislature, effective on July 1, 2001. The revisions represent the first major overhaul to Article 9 since 1972.
Generally speaking, two events must occur before you can be assured of a valid security interest with a priority for the bank. These are the “attachment” and “perfection.”
“Attachment” occurs when there is a written agreement signed or authenticated by the debtor that a security interest will attach. This usually takes the form of, and is identified as, the security agreement. The bank must give value or agree to give value and the debtor must have rights in the collateral.
“Perfection” usually occurs with the filing of a document normally called the financing statement. There are exceptions, such as the perfection of security interests in securities or deposit accounts, which are perfected by “control.” You should check with your bank counsel in all cases in which you have doubts.
“Attachment” and “perfection” may occur at any time and in any order. The bank’s priority, however, is usually determined by the time of filing (the “first to file” rule). If you are interested in security interests in titled motor vehicles, mobile homes or motorboats, your attention is directed to the specific law involving these issues.
This portion of the NBA Compliance Handbook discusses how security interests “attach” to different kinds of collateral and how security interests can be “perfected.” It also deals with questions of priorities among creditors, and with rights of enforcement upon default. The UCC and most particularly Article 9, are highly complex and the following is intended as a general outline only. Questions which are not covered in this material, or which cannot easily be answered by a reference, should be directed to your bank counsel.
Also covered in this section of the NBA Compliance Handbook are the related areas of “Effective Financing Statements,” the EFS Central Filing System, the federal preemption of Section 9-307, UCC, “Check Hostage” provisions, Statutory Lien issues and IRS Federal Tax Lien laws.