I hope some one might have some reference to what laws govern a banks right of set-off or bank liens as to monies deposited in checking accounts? I am a consumer and I a secured vehicle loan through a local bank, I was 13 days late in making my payment and the bank put through a forced pay item into my husbands business account for the loan payment, The loan is NOT under the business it is a personal loan and yes my husbands name is on both, I know that there are certain circumstances that allow banks to this but I can not find any thing that states the criteria, We received no notification via phone, fax, mail, ETc.. Prior to the withdrawal and The few regulations I have found in regards to this reference unsecured loans or mortgages nothing about secured loans, also the definition of default under those laws states that the withdrawal of monies is only if the consumer is in serious default ?? I know you can not give law advice I am only asking for any codes, regulations that will help me I can not find anything about banks drafting accts for loan payments on SECURED loans Thanks for the help

Well, first It is very unsual to offset on an account that is only 13 days past due. Off setting is usually a last resort type of collection method, and is not something that is done (or should be done) just because the loan payment is a few days late.

A bank can offset on accounts in the bank. Check the loan documentation and see if there is anything that relates to giving the bank the authority to offset against any and all assets the bank is holding in your behalf.

You should also call the "Loan Administrator or Senior Loan Officer of the bank. No sense talking to the loan officer as they will just try and justify what they did.

Ask them what authority they have to charge your "non loan related business account" for a personal loan payment, and express your displeasure with such.

The bank values your deposit accounts and your good loan history. If you do not receive a satisfactory explanation, or experience a good attitude or service by the bank in how they handle this, consider moving your accounts elsewhere.