Answer:
Not under the Treasury Department’s regulation on Garnishment of Accounts Containing Federal Benefit Payments. If the depositor moves funds out of the account into which the benefit payments are direct deposited, the funds are no longer considered protected funds under the regulation. While they may be protected under various federal and state statutes, the financial institution cannot protect those funds under the Treasury’s regulation. If state law requires that you protect some or all of those funds, follow the state rules for proceeding with your handling of the garnishment order.
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