N.Y. Uniform Commercial Code Law § 9-340: Effectiveness of Right of Recoupment or Set-off Against Deposit Account

Section 9--340. Effectiveness of Right of Recoupment or Set-off Against

Deposit Account.

(a) Exercise of recoupment or set-off. 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) Recoupment or set-off not affected by security interest. Except as

otherwise provided in subsection (c), 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.

(c) When set-off ineffective. 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 Section 9--104(a)(3), if the set-off is based on a claim

against the debtor.