                                 CODE OF VIRGINIA

CREDITOR PROCESS SERVED ON RECEIVING BANK; SETOFF BY BENEFICIARY&#8217;S BANK
(§ 8.4A-502)

a. As used in this section, &#8220;creditor process&#8221; 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&#8217;s bank has received a payment order for payment to the
beneficiary&#8217;s account in the bank, the following rules apply:

   1. The bank may credit the beneficiary&#8217;s account. 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&#8217;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&#8217;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&#8217;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.

HISTORY: 1990, c. 9.