Does a loan secured by a CD have to have a maturity date the same as the CD? An officer here said yes but I do not agree.

It doesn't have to be the same. It's more convenient. I know our CDs renew automatically so the dates can be different.

Your rate is tied to your CD, so when the CD matures, even if auto renewed, the rate changes, therefore, the loan rate changes. Most places I have worked tie the loan to the maturity date of the CD, and then renew the loan. But if you want a different maturity date, then the note must indicate when the rate can change and how often until maturity. Much easier to tie to CD maturity date, IMO.

Thanks for your help!

If this is a consumer transaction, depending on your state, you most likely will not have a perfected security interest in the CD. Just thought you would like to know.

If the maturiy dates of the loans and CD are not the same?

No. The cause is the Scope section of Article 9. Most state eliminated perfection of a security interest on a deposit account in a consumer transaction. Most CDs (in most states) are considered a deposit account. There is a way around the problem but it is not commonly understood.

This is a state specific problem. In what state are you located?

I'm in Texas.

Texas does not have the same problem as most states. Though it did eliminate "an assignment of a deposit account"..."in a consumer transaction" it added the phase "other than a nonnegotiable certificate of deposit". Therefore, a CD is not a problem in Texas. However a security interest in any other deposit account is a problem unless you know and use 9.304 to your advantage.

Ok, good. We do not accept any deposit accounts as collateral except CDs.

Is there something that says how long you can place a hold on a CD held as collateral for a loan? Our bank is a state bank and it typically places a hold on a CD for 10 yrs past the maturity date of the loan to make sure the hold does not expire before the loan pays off. I am not sure this is legal.

I don't think it matters how long you put the hold for on your system. That's internal. The CD secures the loan until it's paid in full. Once it is you promptly remove the hold and return the collateral.