BEGGING YOUR PARDON

Thank you to all of the sharp-eyed readers who called or wrote to us regarding a question and answer in the August issue of the Community Bankers' Advisor pertaining to snowmobiles. While we cannot go into the facts of the question due to confidentiality concerns, we can say that this query was put to us by an entity that was kicking around the idea of offering a credit card with which to purchase snowmobiles, among other things, and was also interested in purchase money security interest issues related to floorplan financing. Unfortunately, when we edited for space, we left out that and other essential background information. In doing so we caused a lot of confusion, and we heartily apologize for that.

It remains the law in North Dakota that under the motor vehicle statutes, perfection of a security interest in motor vehicle which is not inventory held for sale may be accomplished by clearly indicating the security interest upon the certificate of title or by possession of the certificate of title by the secured party. If, on the other hand, a motor vehicle is held as inventory for sale by a dealer in the business of selling goods of that kind, the creditor advancing money for the wholesale financing of the new motor vehicle should file a financing statement as indicated under N.D.C.C. § 41-09-23 if it wants to obtain a purchase money security interest in that vehicle. See In re Buckley, 5 Bankr. 503 (8th Cir. 1980); Ramsey National Bank & Trust Co. v. Suburban Sales and Serv., Inc. of Devils Lake, 231 N.W.2d 732 (N.D 1975).