11/22/2010
Can I exercise a right of offset against an account for which the debtor is named a Pay on Death beneficiary?
05/24/2010
If we have a representative payee account and the ward on this account comes to the bank with a check made payable to himself, and wants to cash it, what right of offset do we have? If this were to be a bad check, could we charge it back against the account, since the ward is the owner of the account?
04/05/2010
We received a levy, and the customer has a CD that is pledged as security on a loan. Does our perfected security interest trump the levy or do we have to exercise our right of offset (cash the CD and pay the loan) in order to not be required to satisfy the levy with it? Secondly, if a customer we get a levy on has both deposit accounts and loans, do we have to exercise our right of offset or does simply that right trump the levy. Can the bank say there are no funds available to satisfy the levy, even if the right of offset is not actually invoked, assuming the customer owes more in loans than is in the deposit account?
03/22/2010
With regard to ACH debits to a customer's account, does the RDFI (Receiving Depository Financial Inst.) have the right of offset for ACH debits to a customer's account? Can the RDFI return ACH withdrawals which have already posted to a customer's account without the customer's consent and without an affidavit of unauthorized ACH form (return code R10), only because the customer's account is showing a negative balance?
11/23/2009
Does having right of offset mean that a bank can hold available funds in a checking account and refuse to cash checks against it? I know that it would give us the right to debit the funds that are available to pay the delinquent debt, but I didn't think we could just slap a hold on the account?
01/19/2009
We have a customer who receives SSI benefits and is overdrawn a significant amount due to a returned item. Do we have the right to take the SSI direct deposit and apply it to the overdraft or is the customer entitled to the complete benefit?
12/15/2008
As a bank, do we have to go through our normal collection processes before we can use right of offset from one DDA to another? We normally send the customer several letters and give them up to sixty days to correct an overdraft.
10/13/2008
Do we have the right of offset to collect monies owed from a corporate checking account which was overdrawn for 45 days due to fees? The customer promised to come in and pay up but never did and we have since closed the account. Can we collect fees owed from his personal checking account? He was the only owner on the corporate account.
03/24/2008
Does a bank have the right of offset between two checking accounts or a checking and a savings account? I know a bank can debit a checking or savings account to cover a loan payment, however, I am not sure what the rules are between two deposit accounts.
08/20/2007
Our lending operations department (not credit card) would like to initiate an EFT through our third party vendor to debit our customer's deposit account to exercise our right to offset for amounts owed on our customer's loan. Our deposit account terms and conditions discloses our right to offset any amounts owed to the bank. We know that generally Reg E, Section 205.3 (c)(5) would allow the bank to electronically transfer funds between a customer's accounts without the customer's specific request under certain circumstances and that the official commentary provides that this exception to Reg E includes the right to initiate "electronic debits or credits to consumer accounts for check charges, stop-payment charges, NSF charges, overdraft charges, provisional credits, error adjustments and similar items that are initiated automatically on the occurrence of certain events." In order to exercise our right to offset electronically, the transaction will need to be processed through our third party vendor. Do we have any Reg E or other regulatory concerns in doing so?