Which statement about Purchase Money Security Interests (PMSIs) is correct?

Which statement about Purchase Money Security Interests (PMSIs) is correct?

• A. PMSIs in consumer goods require filing to perfect.
• B. PMSIs in consumer goods enjoy automatic perfection, and no financing statement filing is required.
• C. PMSIs in consumer goods can never be perfected.
• D. PMSIs in consumer goods always require a financing statement even if the goods are consumer.

Answer: (B)

The key idea here is automatic perfection for a Purchase Money Security Interest in consumer goods. When a lender finances the purchase of consumer goods and takes a PMSI, the security interest is perfected automatically at the moment it attaches. No financing statement filing is required to achieve perfection, so the secured party gains priority without any filing—provided the collateral remains consumer goods. The other statements miss this nuance: filing is not required for perfection in this scenario, a PMSI in consumer goods can be perfected, and you don’t always need a financing statement even if the goods are consumer.

The key idea here is automatic perfection for a Purchase Money Security Interest in consumer goods. When a lender finances the purchase of consumer goods and takes a PMSI, the security interest is perfected automatically at the moment it attaches. No financing statement filing is required to achieve perfection, so the secured party gains priority without any filing—provided the collateral remains consumer goods. The other statements miss this nuance: filing is not required for perfection in this scenario, a PMSI in consumer goods can be perfected, and you don’t always need a financing statement even if the goods are consumer.