KRS 355.4-303: When items subject to notice, stop-payment order, legal process, or setoff

-- Order in which items may be charged or certified.

(1) Any knowledge, notice, or stop -payment order received by, legal process served

upon, or setoff exercised by a payor b ank comes too late to terminate, suspend, or

modify the bank's right or duty to pay an item or to charge its customer's account for

the item if the knowledge, notice, stop -payment order, or legal process is received

or served and a reasonable time for the bank to act thereon expires or the setoff is

exercised after the earliest of the following:

(a) The bank accepts or certifies the item;

(b) The bank pays the item in cash;

(c) The bank settles for the item without having a right to revoke the settlement

under statute, clearing-house rule, or agreement;

(d) The bank becomes accountable for the amount of the item under KRS 355.4 -

302 dealing with the payor bank's responsibility for late return of items; or

(e) With respect to checks, a cutoff hour no earlier t han one (1) hour after the

opening of the next banking day after the banking day on which the bank

received the check and no later than the close of that next banking day or, if

no cutoff hour is fixed, the close of the next banking day after the banking day

on which the bank received the check.

(2) Subject to subsection (1), items may be accepted, paid, certified, or charged to the

indicated account of its customer in any order.