Tex. Bus. & Com. Code § 9.340

EFFECTIVENESS OF RIGHT OF RECOUPMENT OR SET-OFF AGAINST DEPOSIT ACCOUNT

Known as the Uniform Commercial Code

The act spans §§ 1–12 (616 sections).

Applied in 2 court decisions — leading case Quisenberry v. American State Bank (In Re Quisenberry) (2004)

Most recently applied in 717 F. Supp. 2d 599 - City Bank v. Compass Bank (May 2010)

Added by Acts 1999, 76th Leg., ch. 414, Sec. 1.01, eff

(a) 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) Except as otherwise provided in Subsection (c), the application of this chapter 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) 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 that is perfected by control under Section 9.104(a)(3), if the set-off is based on a claim against the debtor.

Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.