Ensure it is not actually a retirement account and verify state law, but generally yes. Be careful though, you may only be able to do this once as the customer will likely close out that account.
And I would recommend waiving the early withdrawal fee (assuming it is more than a week old) so as to not rub salt in the wound.
Section 226.12(d) prohibits offsets by credit card issuers, but other types of credit are fair game unless state law imposes a tougher requirement.
I'm with Andy on the need for a strategy in a case like this.
If the credit is slow, you and the customer should discuss and agree that the CD will be reduced in order for the customer to catch up and stay current. This would be an isolated accommodation and the customer would be expected to stay current.
If the account is in default, it's not smart to keep it on life-support by dipping into the CD monthly. In this case, I would declare the loan in default, liquidate both accounts and return any excess proceeds of the CD to the customer.
In both cases, I would apply the penalty for early withdrawal if your contract allows.
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