Compliance Bulletin

Bank Violated “Coogan Act” by Charging Account Fees
June 1, 2015

A California appeals court held that a bank could be held liable for violating the Coogan Act if it assessed account maintenance fees without first obtaining court approval. A provision of the act states, “No withdrawal by the beneficiary or any other individual, individuals, entity, or entities may be made of funds on deposit in trust without written order of the superior court.” The trial court had dismissed the case, ruling that “withdrawal” as used in the statute did not include debiting an account for service charges. However, the court of appeal reversed. Because the decision is an interpretation of existing law it exposes banks to liability if they have charged fees on Coogan Trust Accounts. Please see CBA’s Regulatory Compliance Bulletin for more information. 

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