Does the renewal of a crop loan require a new UCC?

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Question:

On a renewal of an existing loan using crops as collateral, a new security agreement is required. Is it necessary to file a new UCC? The UCC filed when the loan was originally done (along with the original security agreement) is good for 5 years, so why would it be necessary to file a new UCC every year even though a new security agreement is required every year?

Answer:

Unless the description of the collateral has changed, the filing of a new UCC financing statement will not normally be necessary. Under revised Article 9, a security interest in farm products is perfected under the local law of the jurisdiction where the debtor is located so make sure you check the appropriate state law to make sure a non-uniform provision was not adopted by the state. Sections 9-301 and 9-307

First published on BankersOnline.com 05/5/03