In 2009, while Ted was living in State A, he took out a loan from First Bank. To secure the loan, he granted a security interest in his prized stamp collection to First Bank. First Bank filed a financing statement to perfect the security interest.
In January 2010, Ted met the love of his life and moved to State B to live with her. It is now March 2010 and Ted has taken a loan from Second Bank to pay for the wedding. He has once again granted a security interest in his stamp collection, this time to Second Bank.
Must First Bank file a new financing statement in State B to maintain its perfection and priority?
1. Yes. First Bank must file a financing statement in State B or its perfection will lapse in May 2010.
2. Yes, First Bank must file a financing statement to maintain perfection; even if it does, however, it will have second priority to Second Bank under the first to file rule governing priority.
3. No. First Bank does not need to do anything to maintain continuous perfection.
4. No, because First Bank’s perfection lapsed the moment Ted moved from State A to State B.