Garnishment of Protected Funds


Presented by: John Burnett

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Failure to process a garnishment correctly can leave a financial institution directly liable for the funds it failed to deliver. In some states, that failure can make it liable for the entire amount of the judgment. In this compliance arena, decisions must be made quickly and correctly based on pre-established mechanisms.

When an account subject to garnishment receives certain identified federal recurring payments, Treasury Department regulations require that special routines be used to determine whether any of the funds in the account are protected under the regulation and to how to proceed in responding to the garnishment order. Failure to follow these special routines can result in remitting protected funds to the garnishor, which can cause an avoidable hardship for your depositor, or failing to remit the funds required, either of which risks liability for the bank.

Attendees at this webinar will receive information on -
  • Which types of federal payments can be "protected funds" under Treasury's rule
  • The types of deposits covered by the rule
  • What types of accounts are affected
  • What happens to "protected funds" if they are transferred to other accounts
  • How to recognize levies or garnishments covered by the rule
  • How to recognize garnishments or levies exempted by the rule
  • How to respond to garnishments when "protected funds" are involved
  • How to complete an "account review" under the rule
  • When the account review must be completed
  • How many months of federal payments can be protected
  • Multiple garnishment orders
This presentation does not address state rules on garnishments and levies. It focuses only on the Treasury Department's regulation on Garnishment of Accounts Containing Federal Benefit Payments, 31 CFR Part 212.

About the Speaker: John Burnett joined Glia Group, Inc., and BankersOnline in 2004, and currently serves as Executive Editor. He is a 1990 honors graduate of the Stonier Graduate School of Banking and is an alumnus of the ABA National Compliance School, where he served on the faculty for several years.

John began his banking career in high school when he started as a teller at a $15 million bank that didn't have account numbers for its checking accounts (he says they actually filed by signature!) He joined Cape Cod Bank and Trust Company in 1971 and assumed the position of Compliance Officer in 1976. He also served as corporate secretary and secretary of CCBT's Board of Directors, as well as Clerk of the bank's holding company.

He was a member and Chair of the Massachusetts Bankers Association Legal and Regulatory Compliance Committee, and a member of the American Bankers Association Compliance Executive Committee and NCS/NGCS Advisory Board. He is a regular presenter of BOL Learning Connect webinars and a presenter at BOL Conferences events. As a BOL Guru, John assists bankers handle common and uncommon compliance challenges on the site and its paid subscription service,

This program was recorded in its entirety in February 2019. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.

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  • Model: cd_garnishment0821
  • Manufactured by: Glia Group, Inc.

This product was added to our catalog on Tuesday 18 December, 2018.

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