Bumps on the road to Zion: Pitfalls in the transition rules to revised article 9

On July 1, 2001, revised Article 9 of the Uniform Commercial Code will become effective in most states. Article 9 of the Uniform Commercial Code contains the basic law governing secured finance and its revision marks the most significant change to that law since 1972. The effect of the revision on secured lending will be almost entirely prospective: while the revision will effect the documentation of loans made after July 1, 2001, loans made prior to that date will be unaffected by the change. There are, however, some exceptions to this rule. Lenders which do not take proper precautions could lose liens on certain existing loan collateral after revised Article 9 takes effect.