North Carolina General Statutes 54B-131. Right of setoff on withdrawable accounts
Terms Used In North Carolina General Statutes 54B-131
- Association: includes a State association or a federal association unless limited by use of the words "State" or "federal. See North Carolina General Statutes 54B-4
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Contract: A legal written agreement that becomes binding when signed.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Withdrawable accounts: means accounts in which a customer or member places funds with an association which may be withdrawn by the account holder. See North Carolina General Statutes 54B-4
(a) Every association shall have a right of setoff, without further agreement or pledge, upon all withdrawable accounts owned by any member or customer to whom or upon whose behalf the association has made an unsecured advance of money by loan; and upon the default in the repayment or satisfaction thereof the association may cancel on its books all or any part of the withdrawable accounts owned by such member or customer, and apply the value of such accounts in payment on account of such obligation.
(b) An association which exercises the right of setoff provided in this section shall first give 30 days’ notice to the member or customer that such right will be exercised. Such accounts may be held or frozen, with no withdrawals permitted, during the 30-day notice period. Such accounts may not be canceled and the value thereof may not be applied to pay such obligation until the 30-day period has expired without the member or customer having cured the default on the obligation. The amount of any member’s or customer’s interest in a joint account or other account held in the names of more than one person shall be subject to the right of setoff provided in this section.
(c) This section is not exclusive, but shall be in addition to contract, common law and other rights of setoff. Such other rights shall not be governed in any fashion by this section. (1981, c. 282, s. 3; 1991, c. 707, s. 5.)