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Right of offset, can banks seize funds after merging?


credit_h
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I have a checking/savings account at Chase with $6000.

 

If I owe WAMU $5000 in credit card debt that has been charged off but not yet sold and Chase acquires WAMU, can Chase exercise right of offset from WAMU CC agreement to seize $5000 from my Chase checking/savings account? If yes, can they do that even if it is out of SOL?

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Found this:

"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."

http://www.helpwithmybank.gov/get-answers/bank-accounts/right-of-offset/faq-bank-accounts-right-of-offset-01.html

 

So I guess I could leave money in the same bank I owe credit card debts to without worrying about the funds being seized?

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Except in cases of FDIC takeover where often there is a sale pending in advance of the target bank even knowing the takeover is coming.  One day it is Bank A.  The next day it is a new subsidiary of Bank B and all your money is safe ... until Bank B figures out the match.  Might be interesting if someone does lose money as a result of such an FDIC action and sues FDIC.

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Guest usctrojanalum

Banks cannot use right to offset for credit card debt.  only time i've ever seen it used is on overdrawn checking accounts where the depositor also has a savings account with money in it.

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I would not be a bit surprised to find some lawyerly interpretation somewhere that an offset which could not have been done by Bank A against an account in Bank A because of a defaulted credit card at Bank A suddenly becomes OK to do when the checking account is with Bank B and Bank B buys Bank A where the defaulted card is.

 

We're talking about banks. Heck, whatever rule does exist softening the right of offset is probably on life support, and a few more shrimp and a couple of cocktails at some lobbyist's party and it's history.

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