Exercising the Bank’s Right of Setoff on Deposit Accounts & Loans

A bank has the right to setoff its customer’s account if certain legal requirements are satisfied. This webinar will explain these requirements and will address the steps a bank must take before exercising its right of setoff. If a customer defaults on a loan, when can the bank apply money from the customer’s account to pay the loan? Does the customer have to be notified before the bank exercises its right of setoff? What if the customer’s account has more than one owner? If the bank receives a garnishment from another creditor, can the bank setoff before honoring the garnishment? Learn the answers to these questions and more.

Recorded Wednesday, December 16, 2015

Continuing Education: Attendance verification for CE credits upon request


  • Fundamental nature of the right of setoff
  • Differences between contractual right of setoff and common law right of setoff
  • Differences between setoff and foreclosure of a security interest
  • Requirements the bank must satisfy before setoff is permitted
  • Which accounts are subject to setoff?
  • Competing claims for the customer’s funds – who wins?
  • How the automatic stay in bankruptcy affects the right of setoff

    • Checklist of items that must be satisfied before setoff is permitted
    • Employee training log
    • Quiz you can administer to measure staff learning and a separate answer key


This informative session is designed for bank personnel that are involved in the deposit, garnishment or collection areas, such as deposit operations personnel, collectors, attorneys, compliance officers, customer service representatives, and managers.


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