Can the Bank use other accounts to pay off credit cards without permission?

[SadCredit]

What is the name of your state?What is the name of your state? Oregon

I failed to pay my credit card payment. I am wondering if the Bank can use my Money Market funds or any aother account to pay them off without my permission?

[djohnson]

Are they at the same financial institution? Then chances are yes, it was apart of your agreement. If you are just one payment behind, they may not even research it to find out you have other accounts. It's when they think it will be a problem, they will take the money.

[Veronica1228]

Originally Posted by SadCredit

What is the name of your state?What is the name of your state? Oregon

I failed to pay my credit card payment. I am wondering if the Bank can use my Money Market funds or any aother account to pay them off without my permission?

Yes. It's called a Right to Set Off and is listed in your banks disclosures. You can pick one up at any branch.

[marbol]

Originally Posted by Veronica1228

Yes. It's called a Right to Set Off and is listed in your banks disclosures. You can pick one up at any branch.

Some states don't allow this in all cases. Also, some banks cannot set-off in cases of retirement accounts or tax deferred accounts (in which case penalties apply and other tax laws would prevent this), and they sometimes do not set-off when the debt is created by a consumer credit transaction under a credit card plan.

So the OP should check the terms and conditions. They might not set-off.

At any rate, just tell them you can't pay and work it out.

[Veronica1228]

Originally Posted by marbol

Some states don't allow this in all cases. Also, some banks cannot set-off in cases of retirement accounts or tax deferred accounts (in which case penalties apply and other tax laws would prevent this), and they sometimes do not set-off when the debt is created by a consumer credit transaction under a credit card plan.

So the OP should check the terms and conditions. They might not set-off.

At any rate, just tell them you can't pay and work it out.

The bank I work for has one disclosure that is used across our entire footprint which encompasses most of the country. Name these states that don't allow this along with some statutes.

[djohnson]

Originally Posted by marbol

Some states don't allow this in all cases. Also, some banks cannot set-off in cases of retirement accounts or tax deferred accounts (in which case penalties apply and other tax laws would prevent this), and they sometimes do not set-off when the debt is created by a consumer credit transaction under a credit card plan.

So the OP should check the terms and conditions. They might not set-off.

At any rate, just tell them you can't pay and work it out.

I think you are confusing set-off, with garnishments or levy. Set offs are pretty standard.

[marbol]

Originally Posted by djohnson

I think you are confusing set-off, with garnishments or levy. Set offs are pretty standard.

Not at all. I wasn't confusing set-offs with that. No institution has the right to dip into certain accounts. Let's say I have a 401(k) at your bank and I don't pay a credit card bill. The bank has no right to take my 401(k) which would expose me to a tax liability and penalties in order to set-off my credit card bill. It's just not legal for a bank to step in and force someone to be exposed to IRS tax penalties.

How is that related to a garnishment or levy?

[marbol]

Originally Posted by Veronica1228

The bank I work for has one disclosure that is used across our entire footprint which encompasses most of the country. Name these states that don't allow this along with some statutes.

Sure they do. Because some lawyer probably put the words "where allowed by law" in there somewhere. This takes into account any state laws restricting set-off while allowing your bank to use the same wording in all states.

As for individual state laws regarding set-offs,
see if you can link to these:
[url]http://search.leg.wa.gov/pub/textsearch/ViewRoot.asp?Action=Html&Item=0&X=617110257&p=1[/url]
(Washington State: RCW 62A.9A-340)

New York doesn't allow set-off on any account that gets deposits from Social security or supplemental social security income ([url]http://www.banking.state.ny.us/lo030121.htm[/url])

Should I list more? There are many.

Please don't assume that since a (your) large bank does something that it's legal. Banks do things all the time that are not legal. It's up to the injured party to complain or file suit.

[Veronica1228]

What the heck does New York have to do with anything? The OP is in Oregon. My answer is correct for the state he/she lives in.