Using Right of Offset to Cover an Overdraft

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Question:

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.

Answer:

How the right of offset works varies from state to state. Your contract language may also affect how you manage this process. You'll need to pose your question to bank counsel or other attorney conversant with the laws and legal decisions affecting offset rights in your state.

First published on BankersOnline.com 12/15/08