Let’s assume we receive a garnishment on a customer that has two accounts with us, for instance a checking and a savings account, and a federal benefit payment is received only into the checking account. Do we need only determine if there are protected funds in the checking account, and regardless of the determination remit the balance of the savings account for the garnishment? Or, do we add the balances of the checking account and the savings account to determine a protected amount, regardless of into which account the federal benefit payment is received?

Funds are only protected so long as they remain in the account into which they we credited by direct deposit. Ergo, funds in the savings account would not be protected even if they can be tied back to protected funds deposited into the DDA.

Although the funds in the savings account may enjoy some protection from garnishment under federal or state laws, they have moved outside the umbrella of protection provided by the Treasury's garnishment processing regulation. It will be the customer's responsibility to pursue any such protection on those funds in court. The bank stays out of it.

I appreciate you both for your guidance.