Like current law, if the security interest in the original collateral was perfected, then the proceeds security interest is automatically perfected for a short period of time, giving the creditor an opportunity to take the steps necessary in order to maintain perfection. Compare current §9-306(3) with §9-315(c & d). If the security interest in the original collateral was not properly perfected, then the security interest in proceeds will not be perfected automatically.
The revised act extends the period of automatic perfection from 10 to 20 days. On the 21st day after the security interest attaches to the proceeds, it will become unperfected unless one of three conditions is satisfied. See §9-315(d). Unlike current law, this lapse in perfection is prospective only and apparently does not permit a competing interest that arose while the security interest was perfected to move ahead in priority. See §9-315, cmt. 4. Read more