Exercising the Right of Setoff on Deposit Accounts & Loans

A credit union has the right to setoff its member’s account if certain legal requirements are satisfied. This webinar will explain these requirements and will address the steps a credit union must take before exercising its right of setoff.

If a member defaults on a loan, when can the credit union apply money from the member’s account to pay the loan? Does the member have to be notified before the credit union exercises its right of setoff? What if the member’s account has more than one owner? If the credit union receives a garnishment from another creditor, can the credit union setoff before honoring the garnishment? Learn the answers to these questions and more.

Recorded Thursday, December 17, 2015

Continuing Education: Attendance verification for CE credits upon request


  • Fundamental nature of the right of setoff
  • Differences between contractual right of setoff and common law right of setoff
  • Differences between setoff and foreclosure of a security interest
  • Requirements the credit union must satisfy before setoff is permitted
  • Which accounts are subject to setoff?
  • Competing claims for the member’s funds – who wins?
  • How the automatic stay in bankruptcy affects the right of setoff

    • Checklist of items that must be satisfied before setoff is permitted
    • Employee training log
    • Quiz you can administer to measure staff learning and a separate answer key


This informative session is designed for credit union personnel that are involved in the deposit, garnishment or collection areas, such as deposit operations personnel, collectors, attorneys, compliance officers, member service representatives, and managers.


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