Lending, TUTMA: TUTMA CD Securing Loan
Printer-friendly VersionQuestion:
We have a loan that one of our loan officers made that is secured by a TUTMA CD. The loan review picked it up and wanted some clarification on if it is permissible? Are there any instances where this is permissible? If it was for benefit of the child is it permissible?
Answer:
Usually in a fiduciary relationship the custodian has what is called “naked possession”. That means that the custodian has possession of the asset but not ownership and to pledge as security takes ownership. If have a loan secured by an TUTMA account you have an unsecured loan. The specifics are in the Texas Property Code Chapter 141.