KRS 355.9-340: Effectiveness of right of recoupment or set-off against deposit account.

(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.