Procedures for Garnishments


Presented by: John Burnett
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This CD ROM will be available after August 24, 2022.

When your institution is presented with a garnishment order for funds from a customer's accounts, there is little time to consult with bank counsel to determine how or whether to respond to that claim. There can be legal limits on your time to respond, privacy and other confidentiality issues to resolve, constraints on the funds that can be remitted or held, required forms for your response, and other knotty issues to resolve before you act on the claim.

A failure to understand the third party's claim, a mistake in determining what funds can or cannot be remitted, or a failure to meet a legal deadline for completing the response to these claims can put the financial institution at risk for penalties or damages, or even for the full amount of the claim. One large bank's procedures prompted a May 2022 CFPB enforcement order with a $10 million penalty attached. To avoid such mistakes, financial institutions should have well-researched and clearly written policies and procedures for the intake and processing of garnishments, for providing timely and proper responses to them, and for notifying its customers, when permitted.

This webinar is intended to assist financial institutions in identifying their responsibilities for handling garnishment orders and developing written policies and procedures for processing claims which their legal counsel may review and approve. Both state law and federal law are critical in this effort, and procedures must ensure compliance with both.

The program is not a substitute for legal advice on a particular fact situation. Because state laws vary widely, this presentation will focus on federal claims; the discussion of state rules is necessarily general and will be used to illustrate how a state rule may influence an institution's handling of these claims. Accordingly, the discussion is not focused on the laws of any one state, nor will it provide guidance for handling specific states' requirements. It will, however, illustrate how critical it is to understand state requirements that can affect a bank's procedures. Such issues must be considered with the assistance of an institution's legal counsel.

On completion of this program attendees should be:
  • familiar with the federal claims most likely to be made against customer funds,
  • able to develop a written, systematic plan for handling federal and state third party claims in a timely, well documented fashion and
  • encouraged to present their written procedures for review and approval by legal counsel.
WHO SHOULD ATTEND: Individuals in charge of designing, revising or auditing a procedure for handling third party claims against customer funds are the expected attendees.

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 June 2022.

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  • Model: cd_garnishments0822
  • Manufactured by: Glia Group, Inc.

This product was added to our catalog on Wednesday 29 June, 2022.

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