What is the primary effect of filing a financing statement?

The primary effect of filing a financing statement is to provide public notice of a secured party's interest in collateral. This notice is crucial because it lets third parties know that the secured party has a claim or interest in the specific assets described in the financing statement. This public filing system is designed to protect the rights of secured parties by ensuring that their interests are recognized and can be enforced against the debtor and against other creditors who may have an interest in the same collateral.

When a financing statement is filed, it typically includes pertinent details such as the names of the debtor and the secured party, as well as a description of the collateral. The public nature of this record means that anyone searching the public records can discover the existence of the secured interest, thereby reducing the risk of the secured party's interest being subordinated to subsequent creditors or claimants.

The other options, while related to various aspects of secured transactions, do not capture the primary function of filing a financing statement as well as the correct answer does. For example, creating a private record of a secured party's interest is not the intention of filing; rather, the intention is to make that information accessible publicly. Similarly, establishing a temporary hold on the collateral and guaranteeing that the debtor will not default are not