How does one perfect a security interest by control of the collateral?

Article 9 allows for perfection of a security interest in certain types of collateral by control. These types of assets include deposit accounts, investment properties, letter-of-credit rights, and electronic chattel paper. Control is related to possession and is generally established by a control agreement granting the secured party control over the account or naming the party as owning the account. The authority that the secured party has over the collateral equates to possession.

• Relevant Law: 9-104 thru 107. These types of assets include deposit accounts, investment properties, letter-of-credit rights, or electronic chattel paper. 9-314. Control of a deposit account is held by the financial institution ( 9-104(a)(1)), by a control agreement naming the secured party to control over the account ( 9-104(a)(2)), or as a named party owning the account ( 9-104(a)(3)).