Debbie wanted to take out a loan from First Bank to pay for a new piano. First Bank agrees to give Debbie the loan only if she agrees to grant First Bank a security interest in the piano, in the amount of the loan. Debbie agrees to this, and signs a properly completed financing statement covering the piano. First Bank takes the financing statement to the Secretary of State’s office, where a clerk accepts the financing statement.

A few days later, First Bank and Debbie sign a properly-written Security Agreement in which Debbie grants a security interest in all of her pianos, both currently owned and after-acquired. She doesn’t own any pianos, and doesn’t intend to buy any more than one piano. Unbeknownst to either First Bank or Debbie, however, the Secretary of State’s office has actually lost the financing statement that First Bank filed on the piano, before it was indexed.

One week later, Debbie is considering taking out another loan, from Second Bank, to cover another expense. Second Bank checks the UCC records from the Secretary of State and does not find a financing statement covering the piano. Debbie didn't say anything about First Bank having already filed a financing statement, and agreed to take the loan from Second Bank, using the piano as collateral. Second Bank files a financing statement with the Secretary of State’s office, and Debbie signs a security agreement covering the piano.

A few days after Second Bank filed its financing statement, the filing officer found First Bank’s financing statement in the recycle bin and proceeded to index it.

Which statement is correct?

A. Second Bank has priority in the piano because it relied upon the absence of First Bank’s financing statement from the record.

B. Second Bank has priority because its financing statement was the first to be properly indexed.

C. First Bank has priority because it was first to file its financing statement.

D. First Bank has priority because Debbie commited fraud by entering into the loan agreement with Second Bank.