A new financing statement must be filed to perfect a lien on the current year's crop when a subsequent OL loan is made and FSA already has a valid blanket chattel filing which includes a lien on crops and there are no other intervening liens. What is the validity of this statement?

A new financing statement must be filed to perfect a lien on the current year's crop when a subsequent OL loan is made and FSA already has a valid blanket chattel filing which includes a lien on crops and there are no other intervening liens. What is the validity of this statement?

• A. True
• B. False
• C. Partially True
• D. Not enough information

Answer: (B)

The statement is false because when a new operating loan (OL loan) is made and there is an existing blanket chattel filing by the Farm Service Agency (FSA) that already covers the current year's crops, there is no need to file a new financing statement to perfect the lien on the crops. The existing blanket lien remains valid and continues to cover crops produced during the subsequent year. In this case, the FSA's original blanket filing effectively secures the lender's interest without requiring a new filing, as long as there are no intervening liens that would disrupt that security interest. Understanding this concept is crucial because it highlights the importance of blanket filings in agriculture financing and the way they can simplify the process of securing loans against assets like crops. Knowing when a new financing statement is necessary versus when an existing one suffices can significantly impact the operations of a farm loan officer when advising clients or processing loans.

The statement is false because when a new operating loan (OL loan) is made and there is an existing blanket chattel filing by the Farm Service Agency (FSA) that already covers the current year's crops, there is no need to file a new financing statement to perfect the lien on the crops. The existing blanket lien remains valid and continues to cover crops produced during the subsequent year. In this case, the FSA's original blanket filing effectively secures the lender's interest without requiring a new filing, as long as there are no intervening liens that would disrupt that security interest.

Understanding this concept is crucial because it highlights the importance of blanket filings in agriculture financing and the way they can simplify the process of securing loans against assets like crops. Knowing when a new financing statement is necessary versus when an existing one suffices can significantly impact the operations of a farm loan officer when advising clients or processing loans.