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Legal Issues for Right of Setoff on Deposit Accounts & Loans

Mar 23 2:00 PM - Mar 23, 2021 3:30 PM
Mar 23, 2021 2:00 PM - 3:30 PM
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Setoff is an important legal remedy for financial institutions – if specific requirements are met. Does your institution use this right when applicable, or shy away because the legalities seem too complicated? This webinar will provide examples to help explain the elements and requirements. Attendees will gain a clear understanding from this no-nonsense presentation.

Learning Objectives

  • Explain the legal requirements that must be satisfied before setoff is permitted
  • Differentiate between a contractual right of setoff and a common law right of setoff, and when to use each
  • Distinguish the right of setoff from foreclosure of a security interest, and how to choose the best method
  • List situations when setoff can be used without violating the other parties’ legal rights
  • Identify which accounts and loans are subject to setoff

Your institution has a common law right to setoff a depositor’s account for a debt owed to your institution – if certain legal requirements are satisfied. In addition, your institution may have a contractual right of setoff – depending on the terms of your deposit contracts.

If a debtor defaults on a loan, when can your institution apply money from the debtor’s account to pay the loan? Does the debtor have to be notified beforehand? What if the debtor’s account has a joint owner? If your institution receives a garnishment from another creditor, can you setoff before honoring the garnishment? This webinar will answer these questions and more. Join us to learn the legal requirements that must be satisfied, and the steps required before exercising the right of setoff. 



Elizabeth Fast, JD, CPA, Spencer Fane LLP

Elizabeth Fast is a partner with Spencer Fane LLP where she specializes in there presentation of financial institutions. Elizabeth is the head of the firm’s training division. She received her law degree from the University of Kansas and her undergraduate degree from Pittsburg State University. In addition, she has a Master of Business Administration degree and she is a Certified Public Accountant. Before joining Spencer Fane, she was General Counsel, Senior Vice President, and Corporate Secretary of a $9 billion bank with more than 130 branches, where she managed all legal, regulatory, and compliance functions.




Additional Info

Event Type

On-Demand Webinar

Topics Covered

  • On-Demand Webinars
  • Lending & Collections
  • Compliance