Answers About the Right of Offset
Select from the following questions about banks' right of offset and withdrawing funds to cover a debt owed to the bank.
- May a bank take money from my deposit account to make a payment on a loan that I owe to the bank?
- What can I do if my bank took Social Security money from my checking account to pay on a loan that I owe to the bank?
- My Social Security check was deposited into my bank account. Before my check was deposited I wrote a check for an amount larger than what I had in my account, and the bank used some of the money from my Social Security check to pay the extra amount of the check that was not in my account plus the fee I was charged for making this mistake. May the bank do this?
May a bank take money from my deposit account to make a payment on a loan that I owe to the bank?
Usually, yes. Generally, a bank may take money from your deposit account to make a payment on a separate debt that you owe to the bank, such as a car loan, if you are not paying that loan on time. This is called the right of offset.
In some situations, the bank can exercise the right of offset without letting a customer know in advance that it is going to do it.
However, federal law limits what a bank can do in some cases. For example, federal law won’t allow a bank to offset your deposit account to pay off your consumer credit card account.
What can I do if my bank took Social Security money from my checking account to pay on a loan that I owe to the bank?
You should contact your bank to inform them that the source of some or all of the money in your account was Social Security benefits.
If you are a customer of a national bank and have questions about a bank’s right of offset, you can contact the Office of the Comptroller of the Currency, Customer Assistance Group, at 1-800-613-6743 or Customer.Assistance@occ.treas.gov.
My Social Security check was deposited into my bank account. Before my check was deposited I wrote a check for an amount larger than what I had in my account, and the bank used some of the money from my Social Security check to pay the extra amount of the check that was not in my account plus the fee I was charged for making this mistake. May the bank do this?
Under current law, a bank may administer a consumer’s deposit account by making additions to (credits) and subtractions from (debits) the account, and may charge fees for these services. This is true even when the money in the account is from a Social Security benefits check.