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polet [3.4K]
4 years ago
5

First Federal loaned Madeline $20,000 to purchase a new van. The van was for Madeline's personal and family use. First Federal's

security interest is a purchase money security interest which perfects only upon filing a financing statement. True or false?
Business
1 answer:
ivanzaharov [21]4 years ago
5 0

Answer: False

Explanation:

First Federal's security interest is indeed a Purchase Money Security Interest (PMSI) but it doesn't only perfect upon filing a financing statement.

The PMSI can also be perfected by POSSESSION specifically of TANGIBLE CHATTEL PAPER which is simply a document that states that the holder is owed money and has a security interest in the goods associated with the debt.

In this case that Tangible Chattel Paper can be the car's title which can indicate the car loan as a security Interest.

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