Review the sections on Attachment (section 16-2) and Perfection (section 16-3) in Ch. 16.

U.S. Bank has loaned $1,000,000 to ClearWater so it can purchase water purification equipment.

As part of the loan agreement, a security agreement is signed in which ClearWater puts up as collateral the purification equipment that it will acquire with the loan.

U.S. Bank makes the $1,000,000 loan and ClearWater purchases the equipment and obtains rights to it.

1. (a) What are the requirements for attachment? (b) Are they met here? (c) How are they met? (d) What means of attachment are not applicable in this case?

2. (a) How would the loan officer for U.S. Bank perfect its interest as a creditor? (b) What specifically needs to be done by U.S. Bank? (c) What are two other ways to perfect a security interest that are not applicable here?