Right to Setoff

[mysterion guy]

What is the name of your state (only U.S. law)? California
I recently had a setoff due to a past due credit card. I had 944.00 in the account and they took 900.00 of it. I have found the California Financial code section 864 covers this type of transaction. In paragraph (b) it states A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof. My question is this, is this legal being that the account was under 1000.00 to start with? I talked to the bank and they said there is an amendment to the code that says that they can do it. However I have found no such amendment. Can you please tell me if it it was legal for them to do this ? And if the amendment exists and where I can find it to review? Thanks for your time.

[Wirelessany1]

Originally Posted by mysterion guy

What is the name of your state (only U.S. law)? California
I recently had a setoff due to a past due credit card. I had 944.00 in the account and they took 900.00 of it. I have found the California Financial code section 864 covers this type of transaction. In paragraph (b) it states A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof. My question is this, is this legal being that the account was under 1000.00 to start with? I talked to the bank and they said there is an amendment to the code that says that they can do it. However I have found no such amendment. Can you please tell me if it it was legal for them to do this ? And if the amendment exists and where I can find it to review? Thanks for your time.

Contact the OCC with regards to the setoff you disagree with. I can't for the life of me find an amendment either; but if I remember correctly this is still working its way through the courts.

[mysterion guy]

Thank you for the prompt reply and I appreciate your trying to find the mystery amendment. The person I spoke with claimed the amendment was passed back in 1972. It seems like a long time to still be in the courts, but I guess it shouldn't be of too much of a surprise either. I will contact the OCC. Thanks again.

[latigo]

I’m like you. I don’t find anything indicating that Section 864 (b) has been amended. Nor does it seem likely that it would have been.

But why would you be asking in here (and in other forums instead) of taking the issue directly before the California Department of Financial Institutions?

CALL THEM! LODGE A COMPLAINT!

The contact information can be found at [url=http://www.dfi.ca.gov]California Department of Financial Institutions[/url]

(I hate bankers and their marble edifices almost as much as others hate lawyers.)