Great State Bank and First Federal Bank have a security interest in TriColor's equipment.If neither secured party is perfected,the first interest to attach has priority over the collateral.

Question

Quizplus · Accepted Answer

According to the rule of first-to-file or first-to-perfect, in case of two conflicting security interests over the same collateral, the first interest to attach (either by filing a financing statement or perfecting the security interest) will have priority. Since neither Great State Bank nor First Federal Bank is perfected, the one that attached (filed the financing statement) first will have priority over the collateral.

Great State Bank and First Federal Bank Have a Security