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Can you summarize MNST 336.4A-502?
UNIFORM COMMERCIAL CODE > CREDITOR PROCESS SERVED ON RECEIVING BANK; SETOFF BY BENEFICIARY'S BANK.
Short Summary
This section of the Minnesota Statutes, specifically under the Trade Regulations and Consumer Protection section of the Uniform Commercial Code, governs the handling of creditor process served on a receiving bank and the setoff by a beneficiary’s bank. The document defines ‘creditor process’ as various legal processes issued by or on behalf of a creditor or claimant with respect to an account. If the creditor process is served on the receiving bank and the bank accepts the payment order, the balance in the authorized account is deemed to be reduced by the amount of the payment order, unless the bank had a reasonable opportunity to act on the process before accepting the payment order. If a beneficiary’s bank receives a payment order for payment to the beneficiary’s account, the bank may credit the beneficiary’s account and set off the amount credited against any obligation owed by the beneficiary to the bank or to satisfy creditor process served on the bank. The bank may also allow withdrawal of the amount credited unless creditor process is served in a manner that affords the bank a reasonable opportunity to prevent withdrawal. If creditor process has been served and the bank had a reasonable opportunity to act on it, the bank may not reject the payment order except for reasons unrelated to the service of process. Creditor process with respect to a payment by the originator to the beneficiary can only be served on the beneficiary’s bank, and any other bank served with the creditor process is not obliged to act on it.
Whom does it apply to?
Receiving banks, beneficiary's banks, creditors, and claimants
What does it govern?
Creditor process served on receiving bank; setoff by beneficiary's bank
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota