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Assignment of CD Pledged to Consumer Loan

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  • #3381
    S Bramlett
    Participant

    We have a customer who has pledged a certificate of deposit to his loan. Currently, the CD is styled with a POD (payable on death). Should we have a security agreement and/or pledge aggreement signed by both the CD owner and POD receipant?

    thank you
    Sandra

    #3386
    MCCompliance
    Participant

    The POD would not have to sign, they have no right to the money at this point.

    #3387
    S Bramlett
    Participant

    What happends if the CD owner should die, and the loan has not paid off? Do we still have a good lien perfection?

    #3410
    MCCompliance
    Participant

    The lien would still be good. Our loan agreements state the loan would be in default, so we would apply the CD to the loan prior to anything going to a POD.

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