§490:4A-502  Creditor process served on
receiving bank; setoff 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 on behalf of a
creditor or other claimant with respect to an account.



(b)  This subsection applies to creditor
process with respect to an authorized account of the sender of 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, if the receiving bank
accepts the payment order the balance in the authorized account is deemed to be
reduced by the amount of the payment order to the extent the bank did not
otherwise receive payment of the order, unless the creditor process is served
at a time and in a manner affording the bank a reasonable opportunity to act on
it before the bank accepts the payment order.



(c)  If a beneficiary's bank has received a
payment order for payment to the beneficiary's account in the bank, the
following rules apply:



(1)  The bank may credit the beneficiary's account. 
The amount credited may be set off against an obligation owed by the
beneficiary to the bank or may be applied to satisfy creditor process served on
the bank with respect to the account.



(2)  The bank may credit the beneficiary's account and
allow withdrawal of the amount credited unless creditor process with respect to
the account is served at a time and in a manner affording the bank a reasonable
opportunity to act to prevent withdrawal.



(3)  If creditor process with respect to the
beneficiary's account has been served and the bank has had a reasonable
opportunity to act on it, the bank may not reject the payment order except for
a reason unrelated to the service of process.



(d)  Creditor process with respect to a payment
by the originator to the beneficiary pursuant to a funds transfer may be served
only on the beneficiary's bank with respect to the debt owed by that bank to
the beneficiary.  Any other bank served with the creditor process is not
obliged to act with respect to the process. [L 1991, c 41, pt of §1]