Hello,

This situation does not come up often, so when it does, we are left scrambling and I am hoping others can offer some input.

With the understanding of what Rule 31 CFR 212 requires in order for banks to identify and protect Federal Benefits when presented with a Garnishment order, I am wondering what other MA banks do when the Garnishment is a Court ordered attachment such as a Trustee Summons which also offers protection to the individual on a state level.

For example, we receive a Trustee Summons seeking to attach $20,000 in a civil matter pertaining to John Doe.

At the time of account review, John had an account with $25,000 in it.

Under MA law (Chapter 246, Section 28A), natural persons are entitled to a $2,500 exemption.

Now, we conduct our look-back under the Final Garnishment Rule and discover that John received $2,000 in exempt Federal Benefits.

Is he entitled to a total exemption of $4,500 for both? Do we use whichever rule protects the highest dollar amount? Does the Federal exemption negate the state exemption, even if the protected amount under the state law is greater?

I have attended a couple of webinars on the Final Rule, and if this was addressed, I missed it, but I am hoping there are others out there who can offer some opinions.

Thank you

Your depositor is entitled to the greater protection -- state or federal, but not both (his federal benefits payments may enjoy additional protections not covered by 31 CFR 212, but it's up to him or his attorney to claim them from the court).

If the state protection (in this case, $2,500) exceeds the 31 CFR 212 protected amount (in your example, $2,000) you still follow the federal rule to arrive at its calculated protected amount but hold back the larger $2,500 amount required by the state law, answering the trustee summons with the amount by which the account balance exceeds $2,500. I suggest you follow 31 CFR 212 regarding restrictions on imposing a garnishment fee on the customer, since I believe it's more protective of the consumer than state law in that regard.

I suggest you discuss with local legal counsel whether you should provide the notice to the depositor that's required by 31 CFR 212, and how you should adapt it to avoid confusing the customer.