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It used to be that when your receivership order
authorized you to take over a bank account, you went to the nearest branch
(ideally where the account was opened), presented a copy of the
receivership order, and the bank transferred the money to a new
receivership account that you controlled. That is apparently starting to
change as the result of a recent California law (AB 2364) requiring larger
banks (more than 9 branches) to designate a location(s) to receive
“service of legal process.” Some banks are interpreting this law to
include receivership orders. Although some do not believe a receivership
order is the same as “legal process,” in my experience, arguing with a
bank about legal definitions usually doesn’t get you anywhere very
quickly.
A money center bank recently sent me a letter
designating three new locations – one in California and two in Delaware –
where the bank could be served depending upon the type of service: one
location for in-person service, one for service by mail and one for
service by overnight mail. This bank only accepts certified copies of the
receivership order, and once the order is served on this bank, it
typically takes the bank 7 to 10 days to ‘evaluate’ the receiver’s claim
to the bank account. As more banks implement the law, taking control of
California bank accounts is likely to become harder and more
time-consuming.
Since a bank’s designated location(s) to receive
‘service of legal process’ in California has to be filed with the
California Department of Financial Institutions (DFI), now the Department
of Oversight (http://www.dbo.ca.gov),
you can check the Department’s website to determine the official location(s)
for service before you set out to take over the account.
However, in most cases, a receiver can still just
go to the branch where the account was opened, present the receivership
order, and take control of the account. But just in case the friendly bank
manager tells you he can’t help you, at least you’ll know what to do next.
*David Wald has been a fiduciary for
nearly 20 years as state & federal court Receiver, custodian and referee.
His experience covers over $3 billion of real estate and other business
assets. |
