KRS 355.9-340

Effectiveness of right of recoupment or set-off against deposit account

Known as the Uniform Commercial Code

The act spans §§ 355.10-101 to 355.9-809 (686 sections).

Applied in 1 court decision — leading case Kentucky Highlands Investment Corp. v. Bank of Corbin, Inc. (2006)

Most recently applied in Kentucky Highlands Investment Corp. v. Bank of Corbin, Inc. (September 2006)

Effective: July 1, 2001 History: Created 2000 Ky

(1) Except as otherwise provided in subsection (3) of this section, 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.

(2) Except as otherwise provided in subsection (3) of this section, 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.

(3) 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 KRS 355.9-104(1)(c), if the set-off is based on a claim against the debtor.

Official source: Kentucky General Assembly. Reproduced from public-domain Kentucky statutes; confirm against the official source for the current text. Not legal advice.