New York § 4-A-502 Creditor Process Served on Receiving Bank; Set Off by Beneficiary's Bank

New York Statutes

§ 4-A-502 — Creditor Process Served on Receiving Bank; Set Off by Beneficiary's Bank

New York § 4-A-502

Law UCCUniform Commercial Code

Part 5Miscellaneous Provisions

Art. 4-AFunds Transfers

This text of New York § 4-A-502 (Creditor Process Served on Receiving Bank; Set Off by Beneficiary's Bank) is published on Counsel Stack Legal Research, covering New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

N.Y. Uniform Commercial Code § 4-A-502 (2026).

Text

Section 4-A-502. Creditor Process Served on Receiving Bank; Set Off by\n                   Beneficiary's Bank.\n  (1) As used in this section, "creditor process" means levy,\nattachment, garnishment, notice of lien, sequestration, or similar\nprocess issued by or on behalf of a creditor or other claimant with\nrespect to an account.\n  (2) This subsection applies to creditor process with respect to an\nauthorized account of the sender of a payment order if the creditor\nprocess is served on the receiving bank. For the purpose of determining\nrights with respect to the creditor process, if the receiving bank\naccepts the payment order the balance in the authorized account is\ndeemed to be reduced by the amount of the payment order to the extent\nthe bank did not otherwise receive payment of

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Section 4-A-502. Creditor Process Served on Receiving Bank; Set Off by\n Beneficiary's Bank.\n (1) As used in this section, "creditor process" means levy,\nattachment, garnishment, notice of lien, sequestration, or similar\nprocess issued by or on behalf of a creditor or other claimant with\nrespect to an account.\n (2) This subsection applies to creditor process with respect to an\nauthorized account of the sender of a payment order if the creditor\nprocess is served on the receiving bank. For the purpose of determining\nrights with respect to the creditor process, if the receiving bank\naccepts the payment order the balance in the authorized account is\ndeemed to be reduced by the amount of the payment order to the extent\nthe bank did not otherwise receive payment of the order, unless the\ncreditor process is served at a time and in a manner affording the bank\na reasonable opportunity to act on it before the bank accepts the\npayment order.\n (3) If a beneficiary's bank has received a payment order for payment\nto the beneficiary's account in the bank, the following rules apply:\n (a) The bank may credit the beneficiary's account. The amount\n credited may be set off against an obligation owed by the\n beneficiary to the bank or may be applied to satisfy creditor\n process served on the bank with respect to the account.\n (b) The bank may credit the beneficiary's account and allow\n withdrawal of the amount credited unless creditor process\n with respect to the account is served at a time and in a\n manner affording the bank a reasonable opportunity to act to\n prevent withdrawal.\n (c) If creditor process with respect to the beneficiary's account\n has been served and the bank has had a reasonable opportunity\n to act on it, the bank may not reject the payment order\n except for a reason unrelated to the service of process.\n (4) Creditor process with respect to a payment by the originator to\nthe beneficiary pursuant to a funds transfer may be served only on the\nbeneficiary's bank with respect to the debt owed by that bank to the\nbeneficiary. Any other bank served with the creditor process is not\nobliged to act with respect to the process.\n