Can a bank just remove funds from a payroll account without first notifying the customer? Also, if I deposit funds into an account, can the bank decide to just put it into one of my other accounts after the deposit has been made? Any reference to rules or regulations would be appreciated.
If your instructions are to put a deposit in account A, the bank should follow those instructions. However, it sounds as though your other account at the same bank was overdrawn, and the bank moved funds from "account A" -- your payroll account -- to cover the overdraft. Most bank deposit contracts have language that permits such a move. It's called setting off the bank's obligation to you (the good deposit balance) against your obligation to the bank (the overdraft). Many states also have laws allowing such a transfer.
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If your instructions are to put a deposit in account A, the bank should follow those instructions. However, it sounds as though your other account at the same bank was overdrawn, and the bank moved funds from "account A" -- your payroll account -- to cover the overdraft. Most bank deposit contracts have language that permits such a move. It's called setting off the bank's obligation to you (the good deposit balance) against your obligation to the bank (the 