Topic: Requests for Financial Information
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If we receive a citation or garnishment directed to two judgment debtors holding a joint account, is each debtor entitled to the $4K exemption under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020? For example, let’s say there is a citation against a husband and wife who have a joint account with a balance of $10K. Are we required to release $8K of that balance (providing a $4K exemption for each debtor)? Similarly, let’s say there is a citation against a husband and wife who have a joint account with a balance of $6K. Are we required to release the $6K ($3K exemption for each debtor)? And would the same principles apply to an account held by unmarried joint owners?
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We believe the Illinois Supreme Court’s order requires garnishees and citation respondents to release $4,000 of property back to each judgment debtor, up to a total of $8,000. In your first hypothetical, the order would require the financial institution to release $8,000 back to the debtors, and in your second hypothetical, the order would require…
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Under the Illinois Supreme Court’s COVID-19 order on post-judgment proceedings served after March 8, 2020, if a financial institution releases a debtor’s funds totaling less than $4,000, is the financial institution expected to continue freezing funds that come in after the release? For example, say we receive a citation to discover assets for a judgment of $10,000 on a consumer account containing $3,000. If we release the $3,000, are we expected to place a hold back on the account for purposes of subsequent deposits? If so, would the debtor be entitled to claim an exemption for subsequent deposits up to the remaining $1,000 of the Supreme Court order’s $4,000 threshold?
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Yes, under the Illinois Supreme Court’s order, we believe depository institutions should release from a hold up to a total of $4,000 in funds deposited into a consumer account. In your hypothetical, an additional $1,000 (the remainder of the order’s $4,000 exemption amount) should be released back to the debtor. Once a total of $4,000…
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Can we charge customers (or their authorized representatives) our standard research fee when they request copies of statements or other documents for the purpose of determining Medicaid eligibility? We disclose the research fee in our Truth in Savings Act (TISA) disclosures.
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Yes, we believe you may charge customers or their authorized representatives for research fees related to requests for documents used to determine customers’ Medicaid eligibility — provided such fees are permitted by the terms of your account agreement. We are not aware of any prohibition against charging such fees, and the Illinois Banking Act provides…
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Is a federal or state tax refund that was directly deposited into a checking or savings account subject to garnishment, or is it considered exempt, like a social security or child support payment?
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No, we do not believe that a federal or state tax refund that was directly deposited into a checking or savings account would be exempt from garnishment. Federal benefit payments paid by benefit agencies are considered “protected amounts” that are exempt from garnishment during a lookback period. However, “benefit payments” must be paid by one…
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We received a summons and affidavit for nonwage garnishment for one of our customers in May of 2017, when the customer had approximately $1,600 in their account. We completed the interrogatories attached to the affidavit for nonwage garnishment in June of 2017, when the customer had approximately $2,000 in the account, and we listed that amount. The judgment entered against our customer exceeded $2,000, so we turned over the full amount held in the account. Did we respond correctly?
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No, we believe that when responding to an affidavit for nonwage garnishment, you should list only the property belonging to the debtor in your possession as of the date you were served with the garnishment affidavit and summons. Your bank, as the “garnishee” in possession of a judgment debtor’s property, is responsible for placing a…
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We have a customer with a home equity line of credit (HELOC) at our bank who believes that there has been fraudulent activity on his account. The customer said that a fraudulent check was drawn on the HELOC and paid to another bank. Do we have a permissible purpose to pull this customer’s credit report — without obtaining his permission — to determine if there has been any fraud on the account? Can we pull the credit report if the customer does grant permission?
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Yes, we believe you have a permissible purpose under the Fair Credit Reporting Act (FCRA) to pull the customer’s credit report without his permission in this situation. You also may pull a credit report with the customer’s written permission. The FCRA permits a bank to obtain an individual’s credit report in limited circumstances, including for…
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Are we required to send a copy of a levy we received to the customer who is the subject of the levy?
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Yes, we recommend mailing a copy of a state or federal tax levy to your customer before responding, unless the levy prohibits your bank from doing so. The Illinois Banking Act requires banks to mail a copy of a “subpoena, summons, warrant, citation to discover assets, or court order” before responding, “unless the bank is…
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We have a customer who we suspect may be hiding funds from his ex-wife to avoid paying child support. He asked a teller whether a levy or garnishment could reach the property stored in his safe deposit box. Is that possible?
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Yes, it is possible for a creditor to levy or garnish the contents of a safe deposit box to satisfy a debt. The Illinois Code of Civil Procedure provides procedures for a judgment creditor to discover and require delivery of a judgment debtor’s assets. The citation to discover assets that is served on a judgment…
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We are a national bank and recently have been receiving several subpoenas that require a huge amount of work. For example, a recent grand jury subpoena that was faxed to our bank required us to provide full historical documentation for twelve accounts, among other documents. The subpoena did not provide a reasonable amount of time for a bank of our size to respond. This issue also is common in civil cases, such as divorce cases requiring voluminous financial information. Can we require that subpoenas be sent by mail or delivered in-person, instead of faxed? How can we protect ourselves against subpoenas that require hours of investigation involving multiple employees and mounds of paper?
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We contacted your primary federal regulator, the OCC, without identifying your bank. While the OCC attorney we spoke with stated that national banks are required to fully comply with subpoenas, including any deadlines stated in the subpoenas, they also opined that national banks and federal savings associations must look to state law when responding to…
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A local nursing home is requesting customer records on behalf of a government agency for Medicaid asset verification purposes. Are we required to provide customer records without a power of attorney from the customer? Can we charge for providing the documents? The nursing home claims we cannot charge them because the records are for a government agency.
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No, a bank is not required to — and should not — provide customer records for Medicaid asset verification purposes to a nursing home in the absence of a valid power of attorney or customer authorization. An Illinois law that became effective in 2019 created a statutory “consent and authorization form” for customers to use…