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Looking at Accounts Individually "Protected Funds"

Question: 
I attended the 2011 webinar, "New Requirements for Identifying Exempt Funds When Processing Garnishments: Final Regulations." Do we look at each account individually? A savings account has no "protected funds" going into it, however, the funds are from a checking account that is "protected." Does this matter or do I just take the savings account and not look back?
Answer: 

Answer by Linda Westfall: If a debtor has multiple accounts, including joint accounts that might be subject to the garnishment, an account review must be completed for each account. You do not have to review account types which do not allow direct deposits; e.g. a time deposit.

Answer: 

Answer by John Burnett: Also be careful to note that if the customer has moved funds from the account receiving the direct deposit (for example, a checking account) into another account (a savings account, for example), the funds lose their special status under the regulation. You only look at specially-designated ("XX"-labeled) direct deposit transactions into each account.

Answer: 

Answer by Ken Golliher: As noted, you will do an account review for every account where protected funds might be found.

However, if you have an account where there are no benefit payments; e.g. a nice fat savings account or even a time deposit which can satisfy the garnishment, you will simply follow the instructions in the garnishment and, as you put it, "not look back." The "Notice" discussed in the federal regulation would not be sent.

First published on BankersOnline.com 8/15/11

First published on 08/15/2011

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