Opinion ID: 348299
Heading Depth: 1
Heading Rank: 2

Heading: The Description of the Property of Plaintiff

Text: 18 The security agreement created a security interest in lender's favor in the following property of borrower: 19 (1) All furniture, appliances and other household goods and chattels located in or about Debtor's residence . . . . 20 (4) All accessions to, substitutions for, replacements of and proceeds from the described collateral. 21 (I)f this Security Agreement includes other personal property, Debtor(s) covenant(s) they will not remove such other personal property from their residence, without the written consent of the Secured Party. 22 Section 226.8(b)(5) requires the lender to provide the borrower with a clear identification of the property to which the security interest relates. It is argued that the description provided by the language in this agreement is not clear because it does not list the household goods to which it applies, it does not state that only items belonging to the debtor are included, and it does not provide adequate notice that after-acquired property is included. 23 Requiring a detailed list of items covered would burden creditors and rob credit relationships of flexibility which reduces costs which must be ultimately borne by the debtor. See Matter of Dickson, 432 F.Supp. 752, 757 (W.D.N.C.1977). The novel theory that the description could encompass property belonging to third parties is hypertechnical and ignores the realities of the security agreement. Fundamental to a secured party's acquisition of a security interest in property of the debtor is that the debtor have rights in the collateral. Ga.Code Ann. § 109A-9-204(1). A security interest can be created in no other property. The Truth-in-Lending Act should not be used as a shield to protect the debtor on this kind of argument. Tinsman v. Moline Beneficial Finance Co., 531 F.2d 815 (7th Cir. 1976), stands alone and is contrary to the Federal Reserve Board's position that approves designation of household goods alone, without requiring the security agreement to specify that these are the debtor's household goods and not those of a third party. See Gibson v. Family Finance Corp., 404 F.Supp. 896, 898 (E.D.La.1975) (dictum); Slatter v. Aetna Financing Co., 377 F.Supp. 806, 809-810 (N.D.Ga.1974), remanded on other grounds sub nom., Jones v. Community Loan and Investment Corp., 544 F.2d 1228 (5th Cir. 1976); Kenney v. Landis Financial Group, Inc., 349 F.Supp. 939, 944-945 (N.D.Iowa 1972); FRB Letter of August 26, 1971, (1969-1974 Transfer Binder) CCH CONS.CRED.GUIDE P 30,727. 4 The provision for after-acquired collateral is clear as to what is, or may be, included, and satisfies 12 C.F.R. § 226.8(b)(5), which requires that notice that after-acquired property will be subject to the security interest shall be clearly set forth. 24