Tex. Bus. & Com. Code Section 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, and 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.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.

Source: Section 4A.502 — Creditor Process Served on Receiving Bank; Setoff by Beneficiary's Bank, https://statutes.­capitol.­texas.­gov/Docs/BC/htm/BC.­4A.­htm#4A.­502 (accessed Mar. 23, 2024).

4A.101
Short Title
4A.102
Subject Matter
4A.103
Payment Order--definitions
4A.104
Funds Transfer--definitions
4A.105
Other Definitions
4A.106
Time Payment Order Is Received
4A.107
Federal Reserve Regulations and Operating Circulars
4A.108
Relationship to Electronic Fund Transfer Act
4A.201
Security Procedure
4A.202
Authorized and Verified Payment Orders
4A.203
Unenforceability of Certain Verified Payment Orders
4A.204
Refund of Payment and Duty of Customer to Report with Respect to Unauthorized Payment Order
4A.205
Erroneous Payment Orders
4A.206
Transmission of Payment Order Through Funds Transfer or Other Communication System
4A.207
Misdescription of Beneficiary
4A.208
Misdescription of Intermediary Bank or Beneficiary’s Bank
4A.209
Acceptance of Payment Order
4A.210
Rejection of Payment Order
4A.211
Cancellation and Amendment of Payment Order
4A.212
Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order
4A.301
Execution and Execution Date
4A.302
Obligations of Receiving Bank in Execution of Payment Order
4A.303
Erroneous Execution of Payment Order
4A.304
Duty of Sender to Report Erroneously Executed Payment Order
4A.305
Liability for Late or Improper Execution or Failure to Execute Payment Order
4A.401
Payment Date
4A.402
Obligation of Sender to Pay Receiving Bank
4A.403
Payment by Sender to Receiving Bank
4A.404
Obligation of Beneficiary’s Bank to Pay and Give Notice to Beneficiary
4A.405
Payment by Beneficiary’s Bank to Beneficiary
4A.406
Payment by Originator to Beneficiary
4A.501
Variation by Agreement and Effect of Funds Transfer System Rule
4A.502
Creditor Process Served on Receiving Bank
4A.503
Injunction or Restraining Order with Respect to Funds Transfer
4A.504
Order in Which Items and Payment Orders May Be Charged to Account
4A.505
Preclusion of Objection to Debit of Customer’s Account
4A.506
Rate of Interest
4A.507
Choice of Law

Accessed:
Mar. 23, 2024

§ 4A.502’s source at texas​.gov