Here is my interpretation. The MLA rule says is that a bank can exercise its statutory right to setoff to use its security interest in deposited funds for repayment. Note the term "statutory right" in this. You may have a contractual right in your agreement with the borrower, you may have the common law right, but do you have a statutory right? Look to state law unless you are a CU, in which case federal law may be your answer at USC 1757(11).
Last edited by Andy Z; 09/28/16 09:44 PM.
I can tell you OK and TX have a statutory right but I'm told that not all states do. No, I do not have a list.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell