What exactly is a UCC account definition when setting up secured transactions?

This is solid advice. We learned the hard way that account numbers can change during bank system updates, so overly specific descriptions can create gaps in coverage.

Agreed on the general description approach. Just make sure your security agreement has more detailed account identification to support the UCC filing.

Wait, so the UCC-1 filing isn't enough to perfect against deposit accounts? I thought we just needed to file with the correct collateral description.

Correct - deposit accounts require control for perfection, not just filing. The UCC-1 establishes priority dates but control is what actually perfects your interest.

This is a common misconception. Equipment and inventory can be perfected by filing alone, but deposit accounts need that extra control step.

How does that verification process work? Do you just upload both documents?

Yeah, you upload your security agreement and UCC-1 as PDFs and it flags any mismatches in collateral descriptions, debtor names, that sort of thing. Pretty straightforward.

Good point about securities accounts. We had a borrower with both checking accounts and investment accounts at the same institution and needed different perfection methods for each.

The terminology can definitely trip you up. 'Deposit account' has a specific meaning under Article 9 that's different from how banks use the term.

That's probably too general for effective perfection. You'd want to identify at least the financial institutions where the accounts are maintained.

Oh no... do I need to file an amendment? This loan closed two weeks ago and I'm panicking that we don't have proper security.

Don't panic yet. Check your security agreement language - if that's more specific, you might be okay. But yeah, you'll probably want to tighten up the UCC description.

I hear you on the frustration, but the flexibility is actually helpful once you understand the rules. Different collateral types need different approaches.

Maybe for you experts, but for those of us who don't live and breathe this stuff, it's incredibly stressful knowing one wrong word could invalidate your security interest.

That's a smart approach. Did you file the schedule as an attachment or reference it in the collateral description box?

We referenced it in the description and attached it as an exhibit. Most filing offices accept attachments for complex collateral descriptions.

Just make sure your state filing office accepts attachments. Some are picky about format requirements.

That's a perfect example of why general descriptions work better for deposit accounts. Account numbers are just too volatile.

Ouch. That's an expensive lesson. Did they end up having to write off part of the loan?

They recovered most of it through other collateral, but definitely took a hit. Could have been avoided with better UCC drafting upfront.

How reliable is automated checking for something this technical? I'd be worried about missing nuances that require human review.

It's not perfect but it catches obvious mismatches that humans often miss when reviewing multiple documents. Still need legal review for complex situations.

That's about as broad as you can go while still being meaningful. Should give you good coverage as long as your control agreements match up.

This thread has been incredibly helpful. Sounds like I need to focus more on the control agreements than perfecting my UCC collateral description.

Exactly right. The UCC filing establishes priority, but control is what actually secures your interest in deposit accounts. Get both pieces right and you'll be in good shape.