§ 6A-4.1-502 - Creditor process served on receiving bank – Set off by beneficiary's bank.
SECTION 6A-4.1-502
§ 6A-4.1-502 Creditor process served onreceiving bank – Set off by beneficiary's bank. – (a) As used in this section, "creditor process" means levy, attachment,garnishment, notice of lien, sequestration, or similar process issued by or onbehalf of a creditor or other claimant with respect to an account.
(b) This subsection applies to creditor process with respectto an authorized account of the sender of a payment order if the creditorprocess is served on the receiving bank. For the purpose of determining rightswith respect to the creditor process, if the receiving bank accepts the paymentorder the balance in the authorized account is deemed to be reduced by theamount of the payment order to the extent the bank did not otherwise receivepayment of the order, unless the creditor process is served at a time and in amanner affording the bank a reasonable opportunity to act on it before the bankaccepts the payment order.
(c) If a beneficiary's bank has received a payment order forpayment to the beneficiary's account in the bank, the following rules apply:
(1) The bank may credit the beneficiary's account. The amountcredited may be set off against an obligation owed by the beneficiary to thebank or may be applied to satisfy creditor process served on the bank withrespect to the account.
(2) The bank may credit the beneficiary's account and allowwithdrawal of the amount credited unless creditor process with respect to theaccount is served at a time and in a manner affording the bank a reasonableopportunity to act to prevent withdrawal.
(3) If creditor process with respect to the beneficiary'saccount has been served and the bank has had a reasonable opportunity to act onit, the bank may not reject the payment order except for a reason unrelated tothe service of process.
(d) Creditor process with respect to a payment by theoriginator to the beneficiary pursuant to a funds transfer may be served onlyon the beneficiary's bank with respect to the debt owed by that bank to thebeneficiary. Any other bank served with the creditor process is not obliged toact with respect to the process.