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When an account holder has more than one account and the first account review reveals that there are no protected funds and there is sufficient funds to satisfy the judgement, are we required to conduct a review on the remaining accounts? When reading section 212.5 Account Review, I am finding that we should perform an account review on all accounts.
(f) Separate account reviews. The financial institution shall perform the account review separately for each account in the name of an account holder against whom a garnishment order has been issued. In performing account reviews for multiple accounts in the name of one account holder, a financial institution shall not trace the movement of funds between accounts by attempting to associate funds from a benefit payment deposited into one account with amounts subsequently transferred to another account.
However, I am finding in the analysis of the final rule that agencies agree that it serves no useful purpose to follow the rule’s procedures in situations where a financial institution has made a determination not to take any action affecting an account as the result of the receipt of a garnishment order. The analysis also goes on to say that that if a financial institution will not be freezing or removing funds from an account in response to a garnishment order, then the financial institution should not perform an account review to determine if a protected amount should be established. Does this mean that we don’t have to do an account review on the remaining accounts if there are no protected funds and the amount satisfies the judgement in the first account? In our situation, the first account review did not have protected funds and the amount satisfied the judgement, but some of the remaining accounts do have protected funds.
If we do have to review all accounts, even if the first review satisfies the judgement, are we still required to send the notice since other accounts did have protected funds, even though no funds were garnished from those accounts?
I think this will answer your question. From the Department of the Treasury’s “Guidelines for Garnishment
of Accounts Containing Federal Benefit Payments”: https://www.fiscal.treasury.gov/files/eft/garnishment-guideline.pdf.page 7:
5. Separate account reviews: The financial institution shall perform the account review separately for each account in the name of an account holder against whom a garnishment order has been issued. In performing the account reviews for multiple accounts in the name of one account holder, a financial institution shall not trace the movement of funds between accounts by attempting to associate funds from a benefit payment deposited into one account with amounts subsequently transferred to another account.For example, a $500 SSA benefit payment is deposited into the account holder’s deposit account (Account A). On the same day, the account holder transfers $300 of the $500 to another account in his/her name (Account B) at the same financial institution. The next day, a garnishment order against the account holder is received. The financial institution will be required to conduct separate account reviews for Account A and Account B. The $500 will be included in the protected amount that is established for Account A. However, the $300 that was transferred to Account B will not be included in calculating the protected amount for Account B.
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