Skip to content
BOL Conferences
Thread Options
#2125126 - 04/05/17 03:59 PM Right to Offset
Yankees27 Offline
New Poster
Joined: Oct 2015
Posts: 10
Are we allowed to use Child Support payment to Offset a loan? I know we cannot use Social Security , but I can not find anything that would prevent us from the child support money. Our agreement states "You grant us contractual security interest in all deposits in your accounts, and we have the right to set-off any of your money or property in our possession against any amount you owe us."

Return to Top
Lending Compliance
#2125168 - 04/05/17 05:49 PM Re: Right to Offset Yankees27
Rocky P Online
Power Poster
Joined: Jun 2003
Posts: 7,644
That may be state law - BUT, IMHO

That is taking a HUGE reputational risk. Even if you could, would you want the newspapers to start off with the story about the big mean nasty bank taking food out of a baby's mouth for a missed payment.

I would only due that with the blessings of counsel, the CEO and head of marketing.
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top
#2125192 - 04/05/17 07:19 PM Re: Right to Offset Yankees27
Reg Warrior Offline
100 Club
Joined: Jan 2017
Posts: 214
It is a matter of state law. In my state, child support is not listed as one of the 13 possible exemptions; in addition you must leave an aggregate sum of $1,000 in the savings/checking accounts after the offset.

Also look for "setoff" in place of offset". My state uses them interchangeably.

Return to Top
#2125236 - 04/05/17 10:43 PM Re: Right to Offset Yankees27
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
The whole question of setoff/offset can be a real can of worms if not handled carefully. And the last person in your bank who should be making setoff decisions is a teller who is aware of someone's charged-off account or loan. Letting untrained, uninformed people mess with setoff can cause you untold grief. Have someone in your bank study the question in light of your state's laws, and use an attorney in that discussion. Put together a policy on use of setoff that restricts its use to selected circumstances and individuals who know what the heck they are doing.
Last edited by John Burnett; 04/05/17 10:59 PM.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top

Moderator:  Andy_Z