8.4A-502 - A-502. Creditor process served on receiving bank; setoff by beneficiary's bank.
§ 8.4A-502. Creditor process served on receiving bank; setoff bybeneficiary's bank.
(a) As used in this section, "creditor process" means levy, attachment,garnishment, notice of lien, sequestration, or similar process issued by oron behalf of a creditor or other claimant with respect to an account.
(b) This subsection applies to creditor process with respect to an authorizedaccount of the sender of a payment order if the creditor process is served onthe receiving bank. For the purpose of determining rights with respect tothe creditor process, if the receiving bank accepts the payment order thebalance in the authorized account is deemed to be reduced by the amount ofthe payment order to the extent the bank did not otherwise receive payment ofthe order, unless the creditor process is served at a time and in a manneraffording 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 for payment to thebeneficiary's account in the bank, the following rules apply:
(1) The bank may credit the beneficiary's account. The amount credited maybe set off against an obligation owed by the beneficiary to the bank or maybe applied to satisfy creditor process served on the bank with respect to theaccount.
(2) The bank may credit the beneficiary's account and allow withdrawal of theamount credited unless creditor process with respect to the account is servedat a time and in a manner affording the bank a reasonable opportunity to actto prevent withdrawal.
(3) If creditor process with respect to the beneficiary's account has beenserved and the bank has had a reasonable opportunity to act on it, the bankmay not reject the payment order except for a reason unrelated to the serviceof process.
(d) Creditor process with respect to a payment by the originator to thebeneficiary pursuant to a funds transfer may be served only on thebeneficiary's bank with respect to the debt owed by that bank to thebeneficiary. Any other bank served with the creditor process is not obligedto act with respect to the process.
(1990, c. 9.)