554.9340 Effectiveness of right of recoupment or setoff against deposit account.
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/ia/chapter-554-uniform-commercial-code/554-9340A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. Exercise of recoupment or setoff. Except as otherwise provided in subsection 3, a bank with which a deposit account is maintained may exercise any right of recoupment or setoff against a secured party that holds a security interest in the deposit account.
2. Recoupment or setoff not affected by security interest. Except as otherwise provided in subsection 3, the application of this Article to a security interest in a deposit account does not affect a right of recoupment or setoff of the secured party as to a deposit account maintained with the secured party.
3. When setoff ineffective. The exercise by a bank of a setoff 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 554.9104, subsection 1, paragraph “c”, if the setoff is based on a claim against the debtor.
2000 Acts, ch 1149, §60, 187
Referred to in §554.9109, 554.9341