Difference between revisions of "Security Agreements"

</blockquote>“Bank C takes a security interest over all chattels (personal, moveable possessions) that a consumer owns now and might acquire in the future. (The ''Personal Property Security Act'' allows this type of agreement.) If the consumer owns household furnishings and one car now, and later buys a second car using cash, the second car becomes collateral under the Bank C security agreement. But, consider if the consumer only owned household furnishings when the security agreement with the bank was made. Suppose later the consumer wants to buy a car and does not have the cash to buy it. If a car dealership sells the consumer a car on credit, it will probably want security. (Or, if another creditor — such as a bank — gives the consumer a loan to buy the car, it too will probably want security.) When the car dealership searches the Personal Property Registry, it finds that Bank C has a security agreement that says it can claim collateral over the car that the consumer is about to buy.”