I found this reference online from a credit union. Does this mean not setoff of delinquent account but of a matured, delinquent one only?
Common law set off requires three elements to be met: (1) mutuality of obligation, (2) the debtor member’s owns the funds used for set off, and (3) the debt is mature at the time of set off. Citizens Fed. Bank, FSB v. Zierolf, 119 Ohio App. 3d 46 (1997). Mutuality of obligation requires that the credit union hold funds on behalf of the member debtor and the member is obligated to the credit union. In a typical situation the member has a loan, which makes the member obligated to the credit union. The member also has a share savings and share draft account with the credit union, which makes the credit union obligated to the member. It can include a joint account even though one of the joint owners is not obligated to the bank. Id.; Chickerneo v. Society Nat’l Bank of Cleveland, 58 Ohio St. 2d 315 (1979). It requires, however, that the credit union has rules and regulations to permit the offsetting of funds in a joint account where one of the joint account holders is not obligated to the credit union. Chickernero, at syllabus. In absence of such rules, the funds may not be offset. Nichols v. Metropolitan Life Ins. Co., 137 Ohio St. 542 (1941).