Your are correct that the tool calls for the bank garnishee to provide the prescribed notice even if there are no funds in the account in excess of the protected amount, and therefore no funds are frozen in or taken from the account in response to the gernishment order. You are also correct that the regulation does not required the notice if there are no funds in the account in addition to the protected amount.
However, some banks have elected to provide the notice when conditions 1 and 2, but not condition 3, have been met, to inform the depositor of the garnishment order and to assure the depositor that no funds were frozen or removed from the account(s).
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8