Answer:
An adult may have a representative payee even though he has not been declared legally incompetent under state law. On the other hand, you are on notice that a federal agency has decided he would be better off if they gave money they owe him to someone else to handle.
Your customer has no direct access to the funds paid to his representative payee. The representative payee is not required to make the payments and you cannot compel him to do so. Nor can you exercise a right of set off against the account.
Hopefully, you had other loan applications today...
First published on BankersOnline.com 7/4/11
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