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Category: Consumer Protection Law
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Experience:  20 years experience in consumer advocacy, debt collection violations, contracts, construction
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If I have a delinquent account (credit account) with the bank

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If I have a delinquent account (credit account) with the bank can the bank withdraw money from my checking/savings account to pay the delinquent amount without my permission. I got something in the mail today saying there is class action lawsuit against my credit union because they took money for someone account. There is a statue the notice outlines.

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Now is it the same bank that took money from one account to pay another account (a loan) that you have with them OR, you mentioned something about a credit union and their taking money to pay off a debt (I presume without a notice of garnishment)?

Customer: replied 3 years ago.
Yes, same bank took money from checking to pay for delinquent loan. No notice of garnishment.
OK, if it's the same bank - then pursuant to the UCC (the uniform commercial code) they can take from one account a depositor has and pay a delinquent loan.

You might know the term "cross-collateralization" - it means all your bank debt and money (deposits) are connected. If you have money in your checking account and you fall behind on your credit card, personal loan or car loan with that same bank, the bank can take the payment out of your checking or savings account to pay that delinquent loan. They don't need an order of garnishment.

However, you could have the bank refund the monies if you were to file bankruptcy (last resort and you may not have considered such a drastic measure) and they would have to refund the monies to your savings/checking account.

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