- Consolidated Laws - Uniform Commercial Code
SUBPART 4. RIGHTS OF BANK
Section 9--340. Effectiveness of Right of Recoupment or Set-off Against
Deposit Account.
(a) Exercise of recoupment or set-off. Except as otherwise provided in
subsection (c), a bank with which a deposit account is maintained may
exercise any right of recoupment or set-off against a secured party that
holds a security interest in the deposit account.
(b) Recoupment or set-off not affected by security interest. Except as
otherwise provided in subsection (c), the application of this article to
a security interest in a deposit account does not affect a right of
recoupment or set-off of the secured party as to a deposit account
maintained with the secured party.
(c) When set-off ineffective. The exercise by a bank of a set-off
against a deposit account is ineffective against a secured party that
holds a security interest in the deposit account which is perfected by
control under Section 9--104(a)(3), if the set-off is based on a claim
against the debtor.
Section 9--341. Bank`s Rights and Duties with Respect to Deposit
Account.
Except as otherwise provided in Section 9--340 (c), and unless the
bank otherwise agrees in an authenticated record, a bank`s rights and
duties with respect to a deposit account maintained with the bank are
not terminated, suspended, or modified by:
(a) the creation, attachment, or perfection of a security
interest in the deposit account;
(b) the bank`s knowledge of the security interest; or
(c) the bank`s receipt of instructions from the secured party.
Section 9--342. Bank`s Right to Refuse to Enter into or Disclose
Existence of Control Agreement.
This article does not require a bank to enter into an agreement of the
kind described in Section 9--104(a)(2), even if its customer so requests
or directs. A bank that has entered into such an agreement is not
required to confirm the existence of the agreement to another person
unless requested to do so by its customer.
