Consumer Protection Law

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My question is very specific. It is about bank setoffs as it…

Customer Question
My question is very...

My question is very specific. It is about bank setoffs as it pertains to accounts funded solely with social security payments. I know a bank can setoff with SSI in the same account. I know a bank cannot setoff a credit car or auto loan. My question: Can a bank setoff an overdraft in Chkg Account A with funds from Chkg Account B when B is funded solely from social security payments? Where would get this in writing?

Lawyer's Assistant: What state is this in? And how old is the car?

What car?

Lawyer's Assistant: Has anything been filed or reported?

Nothing is ever filed in a bank setoff! Bank setoffs do not go through a judicial process. There is no 'service' or 'filing'.

Submitted: 3 months ago.Category: Consumer Protection Law
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Answered in 30 minutes by:
3/8/2018
Consumer Protection Lawyer: Loren, Lawyer replied 3 months ago
Loren
Loren, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 38,333
Experience: 30 years experience in general legal matters.
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Banks can legally recover overdraft charges from your Social Security benefits by exercising their right of offset. The right of offset lets a bank take funds from a deposit account to pay a debt owed to the bank. For example, if you owe Bank 1 overdraft charges, it can seize funds from a deposit account held at Bank 1, not any other bank.

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Customer reply replied 3 months ago
I've read very clearly that offset with SSI income pertains only to the same related account. Are you saying the bank can cross post all debits and credits from any account held at the bank and offset with SSI income?
Consumer Protection Lawyer: Loren, Lawyer replied 3 months ago

Yes, and it is usually found in the account agreement you signed when you opened the account.

I am sorry. I wish I could tell you otherwise, but I do not want you spinning your wheels on this.

If you have no further questions, and have not yet done so, please remember to leave a favorable rating (click 5 stars in the rating section on this page). It is the only way that I am credited by JustAnswer for answering your question.

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Thank you for using JA.

Loren

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Customer reply replied 3 months ago
If you are correct, I will pay you. However, if you are giving me incorrect information, I should not have to pay you additional monies.Drew Edwards, Esq. wrote (as attorney for credit unions) in a credit union and banking journal:Social Security Social Security funds are also exempt from the right of setoff. This exemption arises from Section 207 of the Social Security Act (42 USC 407): “The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.” Based on this, the courts have decided that a financial institution cannot offset Social Security benefits against any other debts held by the financial institution. However, this exception also has its own exception: a financial institution can use Social Security funds to offset a debt only if the debt arose from the account in which the Social Security benefits are placed (i.e., an overdraft). This means that you can offset an overdraft with a future deposit of Social Security funds into the same account, but you cannot apply Social Security funds in a member’s share account to a separate delinquent loan account.I also read that Lopez vs. Washington cites that SSI can be used to offset an overdraft WHEN the deposit and overdraft are the SAME account.Any terms in any agreement, or terms of service are only legal if they do not violate federal law. SSI is governed by federal law, so whatever the bank agreement states is meaningless, if laws governing SSI state otherwise.Respectfully, ***** ***** that you consider the content in my last post and clarify how a bank can offset SSI income to ANOTHER account.Thank you.
Consumer Protection Lawyer: Loren, Lawyer replied 3 months ago
I am going to be stepping away. So I will opt out so that another expert can assist you in a timely manner.
You do not have to stay online for the question to be active, or rate this question yet as it would then discourage others from answering. Should a professional pick it up, you should be alerted via email and/or SMS (text message) unless you actively disable these features.There is no need for you to reply at this time as this may "lock" your question back to me, thus inadvertently delaying a response from someone else.My apologies for any inconvenience and good luck.
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