We send refunds from overpayments of loan payoffs to the borrower(s) in a cashier's check. Can we, instead, deposit those funds into the borrower's deposit account?
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Just working here until I get my letter from Hogwarts.
As long as you are depositing the refund to the borrower or borrower's deposit account I do not believe 1026.21 prevents this.
However it is my opinion if the loan is in an individual name then the refund should be deposited to the individual's deposit account and not to a joint deposit account with someone else. Or if the loan is joint then the refund should be deposited to their joint deposit account and not to an individual account. In these cases if there is not an individual account or a joint account then the refund should be made by check to the individual borrower or the joint borrowers.
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The opinions expressed are mine and they are not to be taken as legal advice.