§ 25-4A-502. Creditor process served on receiving bank; setoff by beneficiary's bank.
§25‑4A‑502. Creditor process served on receiving bank; setoff bybeneficiary's bank.
(a) As used in thissection, "creditor process" means levy, attachment, garnishment,notice of lien, sequestration, or similar process issued by or on behalf of acreditor or other claimant with respect to an account.
(b) This subsectionapplies to creditor process with respect to an authorized account of the senderof a payment order if the creditor process is served on the receiving bank. For the purpose of determining rights with respect to the creditor process, ifthe receiving bank accepts the payment order the balance in the authorizedaccount is deemed to be reduced by the amount of the payment order to theextent the bank did not otherwise receive payment of the order, unless thecreditor process is served at a time and in a manner affording the bank areasonable opportunity to act on it before the bank accepts the payment order.
(c) If a beneficiary'sbank has received a payment order for payment to the beneficiary's account inthe bank, the following rules apply:
(1) The bank may creditthe beneficiary's account. The amount credited may be set off against anobligation owed by the beneficiary to the bank or may be applied to satisfycreditor process served on the bank with respect to the account.
(2) The bank may creditthe beneficiary's account and allow withdrawal of the amount credited unlesscreditor process with respect to the account is served at a time and in amanner affording the bank a reasonable opportunity to act to preventwithdrawal.
(3) If creditor processwith respect to the beneficiary's account has been served and the bank has hada reasonable opportunity to act on it, the bank may not reject the paymentorder except for a reason unrelated to the service of process.
(d) Creditor processwith respect to a payment by the originator to the beneficiary pursuant to afunds transfer may be served only on the beneficiary's bank with respect to thedebt owed by that bank to the beneficiary. Any other bank served with thecreditor process is not obliged to act with respect to the process. (1993,c. 157, s. 1.)