Compliance Bulletin

California Overhauls Financial Institutions Legal Process Laws
October 1, 2012

This CBA Regulatory Compliance Bulletin was prepared for CBA by Ted Kitada, Senior Company Counsel for Wells Fargo Bank and Chairman of the CBA Legal Affairs Committee.

I. Background

Effective January 1, 2013, Assembly Bill 2364 will generate a sea change in the manner in which legal process is served on financial institutions in California. As to the personal service of legal process by a levying officer for both attachment and execution purposes under California law, a financial institution may currently designate a central location for the personal service of such legal process against deposit accounts, but not for other types of property. However, generally financial institutions have not employed these options. AB 2364 will prompt changes to these current practices.

This Bulletin will explore current legal process against three property types.

• Deposit accounts.
• Property in a safe deposit box.
• Property held by or for the benefit of the judgment debtor. Such property includes property in safekeeping or debtor’s property held as collateral for an obligation owed to the financial institution.

After a review of current law is an in depth explanation of the anticipated impact of AB 2364 on current legal process.

A. Current attachment process against a deposit account. Currently, for a plaintiff to attach a deposit account, a levying officer must personally serve a copy of a writ of attachment and a notice of attachment on the financial institution or personally serve the same on a central location within the county designated by the institution. If the financial institution does not designate a central location, personal service must be where the deposit account is located. If a copy of the writ of attachment is received at the central location designated by the institution, it applies to all deposit accounts held by the institution, regardless of the location of that account.

An financial institution is not required under CCP § 488.455(a) to designate a central location. Thus, many institutions have not designated a central location, if any. No clear statutory scheme is provided within the CCP.

B. Current attachment process against property in a safe deposit box. Currently, for a plaintiff to attach property in a safe deposit box, the levying officer must personally serve a copy of the writ of attachment and a notice of attachment on the financial institution with which the safe deposit box is maintained. In short, the branch or office of the financial institution with the safe deposit box must be personally served. No central location may be designated.

C. Current attachment process against property held by or for the benefit of the defendant. Currently, under CCP § 488.345, in order to attach tangible personal property in the possession or under the control of a third person, the levying officer is required to comply with CCP § 700.040. Under CCP § 700.040, the levying officer must personally serve a copy of the writ of execution (a writ of attachment in the case of an attachment) and a notice of levy (a notice of attachment in the case of an attachment) on the third person. No central process is available under law. Personal service shall be against the branch or office of the financial institution with possession of the property.

D. Current execution process against a deposit account. Currently, to execute against property or a deposit account, a levying officer must personally serve a copy of a writ of execution and notice of levy on the office or branch of a financial institution that has actual possession of the property levied upon or at which the deposit account is carried and shall be made upon an officer, a manager, or other person in charge of that office or branch at the time of service. Due to the reference to both property and a deposit account, this CCP § 684.110(c ) covers property in a safe deposit box, property held in safekeeping, property held by a financial institution to secure an obligation of the judgment debtor, and a deposit account.

Further, currently, to levy upon a deposit account, the levying officer must personally serve a copy of the writ of execution and notice of levy on the financial institution with which the deposit account is maintained, or personally serve a copy of the writ and notice to a central location within this state, as designated by the financial institution. Thus CCP § 700.140 ties specifically to an execution against a deposit account.

Similar to the law governing attachments, if a financial institution does not designate a central location, personal service must be where the deposit account is located. If a copy of the writ of execution is received at the central location designated by the institution, it applies to all deposit accounts held by the institution, regardless of the location of that account.

A financial institution, however, is not required under CCP § 700.140(a) to designate a central location. Thus, again, many institutions have not designated a central location, if any. No clear statutory structure is provided within the CCP.

E. Current execution process against property in a safe deposit box. Currently, for a plaintiff to execute against property in a safe deposit box, the levying officer personally serves a copy of the writ of execution and a notice of levy on the financial institution. In short, the branch or office of the financial institution with the safe deposit box must be personally served. No central location may be designated.

F. Current execution process against property held by or for the benefit of the judgment debtor. Under CCP § 700.040, the levying officer must personally serve a copy of the writ of execution and a notice of levy on the third person. No central process is available under law. Personal service shall be at the branch or office of the financial institution with possession of the property.

II. AB 2364: The New Central Location Process

Effective January 1, 2013 a new section, CCP § 684.115, has been added. This new law comprehensively changes the statutory requirements governing the designation of a central location for the service of legal process against a financial institution. An institution may designate one or more central locations for service of legal process within this state. However, unlike current law, if an institution has more than nine branches or offices at which it conducts business within this state, it shall designate a central location. For purposes of Title 9 (Enforcement of Judgments), “legal process” refers to writs, notices, orders, or other papers required or permitted to be served thereunder.

The central location designated by a financial institution may cover three property types of the judgment debtor already listed above.

A. Legal process under the new central process. CCP § 488.455 governing attachment against deposit accounts has been amended to refer to new CCP § 684.115, stipulating that § 488.455 is expressly subject to new § 684.115. Thus, attachment against deposit accounts is subject to, and governed by, CCP §§ 482.070(b) and 684.115. Further, CCP § 482.070(b) provides that service of legal process under Title 6.5 (Attachment) is governed by Article 1 (commencing with § 684.010) and Article 2 (commencing with § 684.110) of Chapter 4 of Division 1 of Title 9 (Enforcement of Judgments). Thus, by virtue of CCP § 482.070(b), new CCP § 684.115 is adopted by reference to apply to attachment against deposit accounts.

Under CCP § 488.460 governing attachment against property in a safe deposit box, as mentioned above, a levying officer shall personally serve a copy of the writ of attachment and notice of attachment on the financial institution with which the safe deposit box is maintained. However, if the institution has designated a central location for personal service of a levy against a safe deposit box pursuant to CCP § 684.115, a levying officer may personally serve that central location by virtue of CCP § 482.070(b) detailed above.

For purposes of Title 6.5 (Attachments), the term “legal process” refers to writs, notices, orders, or other paper required or permitted to be served pursuant thereto.

If a financial institution elects voluntarily or is required to designate a central location for service of legal process, it must file a notice of its designation with the Department of Financial Institutions (“DFI”), which is effective upon filing.

The notice must contain all of the following:

• The physical address of the central location.
• The days and hours during which service will be accepted at the central location.
• If the central location will not accept service of legal process directed at deposit accounts maintained or property held at all of the financial institution’s branches or offices within this state, or if the service accepted at the central location will not apply to safe deposit boxes or other property of the judgment debtor held by or for the judgment debtor, the filing shall also contain sufficient information to permit a determination of the limitation or limitations, including, in the case of a limitation applicable to certain branches or offices, an identification of the branches or offices as to which service at the central location will not apply and the nature of the limitation applicable to those branches or offices. If the limitation will apply to all branches or offices of the financial institution within this state, the filing may indicate the nature of the limitation and that it applies to all branches or offices, in lieu of an identification of branches or offices as to which the limitation applies. To the extent that a financial institution’s designation of a central location for service of legal process covers the process directed at deposit accounts, safe deposit boxes, or other property of the judgment debtor held by or for the judgment debtor at a particular branch or office located within this state, the branch or office shall be a branch or office covered by central process.

Should a financial institution required to designate a central location fail to do so, each branch or office of that institution located in this state is deemed to be a central location at which service of legal process may be made, and all of the institution’s branches or offices located in this state is deemed a branch or office covered by the central process. This is the apparent statutory sanction of failing to designate a central location under CCP § 684.115(a). Therefore, a personal service of copy of a writ of attachment and a notice of attachment or a personal service of a copy of a writ of execution and a notice of levy at any branch or office of a financial institution within this state means that legal process affects all branches and offices of that financial institution within this state, regardless of location.

Subject to any limitation noted above, service of legal process at a central location of a financial institution is effective against all deposit accounts and all property held for safekeeping, as collateral for an obligation owed to the institution or in a safe deposit box, if the same is described in the legal process and held by the institution at any branch or office covered by central process and located within this state.

However, while service of legal process at the central location will establish a lien on all property, if any property other than deposit accounts is physically held by the financial institution in a county other than that in which the designated central location is located, the institution shall include in its garnishee’s memorandum the location or locations of the property, and the judgment creditor shall obtain a writ of execution covering the property and directed to the levying officer in that county to accomplish the turnover of the property and shall forward the writ and related required documentation to the levying officer in the county in which the property is held. Pending the personal service of a copy of a writ of attachment and a notice of attachment (or a copy of a writ of execution and a notice of levy in the case of an execution) in that county, while not expressly statutorily required to do so, a financial institution is encouraged to preclude access by the judgment debtor to the property.

A financial institution may modify or revoke any designation of central location by filing the modification or revocation with DFI. The modification or revocation is effective upon DFI updating its records. DFI is required to update its records within 10 business days of filing of the modification or revocation. The judgment creditor may rely on the superseded designation during the 30-day period following the effective date.

DFI shall update its online records to reflect a central location filing by a financial institution or a modification or revocation to such filing filed by an institution within 10 business days following the filing. DFI’s Internet Web site shall reflect the date its online records for each financial institution have most recently been updated. DFI will provide any person requesting it with a copy of each current filing made by a financial institution. DFI may satisfy its obligation by posting all current designations of a financial institution, or the pertinent information therein, on an Internet Web site available to the public without charge, and if that information is made available, DFI may impose a reasonable fee for furnishing that information in any other manner.

As to deposit accounts maintained or property held for safekeeping, as collateral for an obligation owed to the financial institution or in a safe deposit box at a branch or office covered by central process, service of legal process at any location other than a central location designated by the financial institution shall not be effective unless the institution, in its absolute discretion, elects to act upon the process at that location as if it were effective. In the absence of an election, the institution may respond to the legal process by mailing or delivery of the garnishee’s memorandum to the levying officer within the time otherwise provided therefor, with a statement on the garnishee’s memorandum that the legal process was not properly served at the financial institution’s designated location for receiving legal process, and, therefore, was not processed, and the address at which the financial institution is to receive legal process.

If any legal process is served at a central location of a financial institution, all related papers to be served on the institution shall be served at that location, unless agreed to the contrary between the serving party and the institution.

The following applies in the event a financial institution operates within this state at least one branch or office in addition to its head office or main office, as applicable, or an institution headquartered in another state operates more than one branch or office in this state, and no central location has been designated or deemed to have been designated for service of legal process relating to deposit accounts maintained at the institution’s head office or main office, as applicable, and branches located within this state. In short, the institutions covered by this CCP § 684.115(h) are those with nine or fewer branches or offices.

If a judgment creditor reasonably believes that, pursuant to CCP § 700.140 and, if applicable, § 700.160, any act of enforcement would be effective against a specific deposit account maintained at an institution described above, the judgment creditor may file with the institution a written request that the institution identify the branch or office within this state at which a specified account might be maintained.

The request must contain:

• The name of the person reasonably believed by the judgment creditor to be a person in whose name the specified deposit account stands.
• If the name of the person reasonably believed by the judgment creditor to be a person in whose name the specified deposit account stands is not a judgment debtor identified in the writ of execution, a statement that a person reasonably believed by the judgment creditor to be a person in whose name the specified deposit account stands will be appropriately identified in the legal process to be served pursuant to § 700.160, including any supplementary papers, such as a court order or affidavit if the same will be required by § 700.160.
• The specific identifying number of the account reasonably believed to be maintained with the financial institution and standing in the name of the judgment debtor or other person.
• The address of the requesting party.
• A declaration by the judgment creditor or the judgment creditor’s counsel stating substantially the following:

I hereby declare that this deposit account location request complies with Section 684.115 of the Code of Civil Procedure, that the account or accounts of the judgment debtor or other person or persons appropriately identified in the legal process and specified herein are subject to a valid writ of execution, or court order, that I have a reasonable belief, formed after an inquiry reasonable under the circumstances, that the financial institution receiving this deposit account location request has an account standing in the name of the judgment debtor or other person or persons appropriately identified in the legal process, and that information pertaining to the location of the account will assist the judgment creditor in enforcing the judgment.

Under CCP § 684.115(i), the request contemplated by subdivision (h) above shall be signed by the judgment creditor or the judgment creditor’s counsel under penalty of perjury in accordance with the provisions of CCP § 2015.5 and filed at the financial institution’s head office located within this state or, if the financial institution’s head office is in another state, at one of its branches or offices within this state. Failure to comply with the requirements of subdivision (h) and this subdivision (i) shall be sufficient basis for the financial institution to refuse to produce the information that would otherwise be required by subdivision (j).

Under CCP § 684.115(j), within 10 banking days following receipt by a financial institution at the applicable location specified in subdivision (i) of a request contemplated by subdivision (h), the institution shall respond by mailing, by first class mail with postage prepaid, to the requester’s address as specified in the request a response indicating the branch or office location at which the specified deposit account might be maintained, or, if the specified deposit account, if it exists, would not be maintained at a specific location, at least one place within this state at which legal process relating to the deposit account should or may be served.

A response to a request under this subdivision (h) does not require the financial institution to determine whether a deposit account exists. If a deposit account exists, a response to a request under this subdivision (h) does not require the institution to determine whether a deposit account would be reached by legal process. The branch or office location is to be determined and reported by the institution based solely upon its determination that a deposit account with the identifying number provided would be maintained if an account did exist.

The response may not contain any information about the name in which the deposit account stands or any other information concerning the account, if it exists. If more than one account number is specified in the request, the financial institution’s responses as to some or all of those account numbers may be combined in a single writing.

A response furnished in good faith by the financial institution pursuant to subdivision (j) shall not be deemed to violate the privacy of any person in whose name the specified deposit account stands nor the privacy of any other person, and shall not require the consent of the person in whose name the account stands nor that of any other person.

Under CCP § 684.115(l), a financial institution shall not notify the person in whose name the deposit account stands or any other person related to the account of the receipt of a request under subdivision (h) and affecting that person’s or persons’ account, provided that the financial institution shall have no liability for its failure to comply with the provisions of this subdivision (l). This proviso means that while a financial institution is prohibited from contacting the person in whose name the deposit account stands or any other person related to the deposit account regarding the request and response, it has no liability for such contact.

B. Miscellaneous additions to the CCP under AB 2364, The following are some new noteworthy additions to the CCP under AB 2364 in addition to the designation of a central location to have legal process served. Below is a discussion of the miscellaneous impact of AB 2364 as to both attachments and executions.

1. Withdrawal of attached funds for levy processing fees. Under CCP § 488.455(d), a financial institution may not honor a withdrawal request or a check or other order for the payment of money from the deposit account if presentment of that withdrawal request or item to the financial institution occurs during the time the attachment lien is in effect, unless, following that withdrawal or payment, sufficient funds are available to cover the levy.

For these purposes, a withdrawal from the deposit account to cover the institution’s standard fee or charge for processing the levy is not considered a payment of money from the account in violation of this subdivision (d).
2. A third peson in whose name a deposit account stands under attachment. Currently, under CCP § 488.455(b), at the time of levy or promptly thereafter, a levying officer is required to serve personally a copy of the writ of attachment and notice of attachment on any third person in whose name any deposit account stands. Under CCP § 488.455 as amended under AB 2364, as to such third person, subdivision (b) has been moved to subdivision © and the process for service has been amplified, with a mailing option, as follows:

© The levying officer shall serve a copy of the writ of attachment and a notice of attachment on any third person in whose name any deposit account described therein stands. That service shall be made personally or by mail as follows:
(1) At the time of levy or promptly thereafter, if the party seeking the levy informs the levying officer of that person and his, her, or its residence or business address.
(2) Promptly following the levying officer’s receipt of a garnishee’s memorandum if service was not accomplished pursuant to paragraph (1), if the garnishee’s memorandum identifies that person and his, her, or its residence or business address.

Further, under CCP § 488.455(f)(3), the following is not a third person in whose name the deposit account stands:

(3) A person who is only acting in a representative or custodial capacity with respect to benefits paid or payable by the United States government. Rather, accounts maintained by the representative or custodian shall be deemed to stand in that beneficiary’s name, and the amounts therein shall be covered by a levy against that beneficiary.

Thus, based on the above, e.g., a representative payee of a social security benefit payment is not a third person for purposes CCP § 488.455(c).

3. Final payment under attachment. CCP § 488.455 (g) provides statutory guidance as to final payment of a deposit:

(g) For purposes of this section, final payment of a deposit shall be deemed to have occurred in accordance with Section 4215 or 11210 of the Commercial Code or with automated clearinghouse or Federal Reserve System rule, regulation, operating circular, or similar governing document, as applicable to the deposit. If, for any reason, a deposit is returned by the financial institution upon which it is drawn, that deposit shall not be deemed finally collected for purposes of this subdivision regardless of any later payment by the financial institution upon which the deposit is drawn.

4. Safe deposit box contents under attachment. CCP section 488.460(g) is added relating to the removal of the contents of a safe deposit box under a writ of attachment:

(g) If the levying officer removes any property from the safe-deposit box to satisfy the levy, but allows other property to remain in the safe-deposit box, the attachment lien is released automatically with respect to any property that remains in the safe-deposit box.

5. Garnishee’s memorandum under attachment. With respect to the garnishee’s memorandum in response to a writ of attachment and notice of attachment, AB 2364 has incorporated the following amendments.

a. Mandated content. CCP § 488.610(b) mandating the content of a garnishee’s memorandum in response to a writ of attachment includes a new paragraph (5):

(5) A statement that the garnishee holds neither any property nor any obligations in favor of the judgment debtor.

b. Garnishnee’s memorandum under attachment with central location. CCP § 488.610(e) provides that where a deposit account or property in a safe deposit box is attached, the financial institution need not give a garnishee’s memorandum if the institution fully complies with the levy and if a garnishee’s memorandum is required, the memorandum need only provide information with respect property which is carried on the records available at the office or branch where the levy is made, unless the levy has been served at a central location designated by the institution in accordance with § 684.115, in which case the garnishee’s memorandum shall apply to all offices and branches of the institution except to the extent acceptance of the levy at that central location is limited pursuant to paragraph (3) of subdivision (a) of § 684.115.

6. Where “account is carried” at a financial institution. If legal process is required to be personally served on a financial institution in connection with a deposit account, CCP § 684.110© requires that the legal process is to be served at an office or branch “at which a deposit account levied upon is carried.” The phrase “is carried” is explained in a new sentence to that subdivision (c):

For purposes of this section, the office or branch at which a deposit account levied upon is carried shall mean the branch, office, or other location where the financial institution maintains the account.

7. Withdrawal of executed funds for levy processing fee under execution. Similarly to CCP § 488.455(d) described above, under CCP § 700.140(d), a financial institution shall not honor a withdrawal request or a check or other order for the payment of money from the deposit account if presentment of that withdrawal request or item to the institution occurs during the time the attachment lien is in effect, unless, following that withdrawal or payment, sufficient funds are available to cover the levy.

For these purposes, a withdrawal from the deposit account to cover the financial institution’s standard fee or charge for processing the levy shall not be considered a payment of money from the account in violation of this subdivision (d).

8. A third peson in whose name a deposit account stands under execution. Currently, under CCP § 700.140(b), at the time of levy or promptly thereafter, a levying officer is required to serve personally a copy of the writ of execution and notice of levy on any third person in whose name any deposit account stands. Unlike CCP § 488.455(b), service may be made personally or by mail. Under CCP § 700.140 as amended under AB 2364, as to such third person, subdivision (b) has been moved to subdivision © and the process for service has been amplified, as follows:

© The levying officer shall serve a copy of the writ of execution and a notice of levy on any third person in whose name any deposit account described therein stands. That service shall be made personally or by mail as follows:
(1) At the time of levy or promptly thereafter, if the party seeking the levy informs the levying officer of that person and his, her, or its residence or business address.
(2) Promptly following the levying officer’s receipt of a garnishee’s memorandum if service was not accomplished pursuant to paragraph (1), if the garnishee’s memorandum identifies that person and his, her, or its residence or business address.

Further, under CCP § 700.140(g)(3), the following is not a third person in whose name the deposit account stands:

(3) A person who is only acting in a representative or custodial capacity with respect to benefits paid or payable by the United States government. Rather, accounts maintained by the representative or custodian shall be deemed to stand in that beneficiary’s name, and the amounts therein shall be covered by a levy against that beneficiary.

Thus, based on the above, e.g., a representative payee of a social security benefit payment is not a third person for purposes CCP § 700.140(c).

9. Final payment under execution. Similarly to CCP section 488.455 (g) detailed above, CCP § 700.140(h) provides statutory guidance as to final payment of a deposit:

(h) For purposes of this section, final payment of a deposit shall be deemed to have occurred in accordance with Section 4215 or 11210 of the Commercial Code or with automated clearinghouse or Federal Reserve System rule, regulation, operating circular, or similar governing document, as applicable to the deposit. If, for any reason, a deposit is returned by the financial institution upon which it is drawn, that deposit shall not be deemed finally collected for purposes of this subdivision regardless of any later payment by the financial institution upon which the deposit is drawn.

10. Notice to judgment debtor prior to forcing a safe deposit box under execution. Under CCP § 700.150(f), in connection with a levy against property in a safe deposit box, a new obligation on the levying officer to notify the judgment creditor prior to forcing the box is provided:

(f) The levying officer shall give the judgment creditor at least three court days advance notice of the date and time the levying officer will open the safe-deposit box and seize the contents thereof, and the judgment creditor shall be entitled to be present at that time.

11. Safe deposit box contents under execution. Similarly to CCP § 488.460(g) relating to the release of an attachment lien upon removal of the contents of a safe deposit box under a writ of attachment as detailed above, under CCP § 700.150(h) relating to a writ of execution a similar release of an execution lien is provided:

(h) If the levying officer removes any property from the safe deposit box to satisfy the levy, but allows other property to remain in the safe deposit box, the execution lien is released automatically with respect to any property that remains in the safe deposit box.

12. Registered domestic partner under execution. Registered domestic partners will now be treated similarly to a judgment debtor’s spouse for purposes of creditor’s rights.

a. Registered domestic partner’s deposit account or safe deposit box. Under CCP § 700.160(a), generally a court order is required to levy against a deposit account or a safe deposit box standing in the name of a person other than the judgment debtor, either alone or together with third persons, unless the legal process served on the third party includes a court order authorizing the levy.

Under subdivision (b)(2), paragraph (2) is amended so that a court order is not required to levy on deposit account or safe deposit box standing in the name of the judgment debtor’s spouse or registered domestic partner, provided an affidavit is delivered at the time of levy showing that person is the judgment debtor’s spouse or registered domestic partner.

Therefore, in light of this amendment, a registered domestic partner is treated similarly to a judgment debtor’s spouse for making that domestic partner’s deposit account or contents of a safe deposit box available to a judgment creditor.

b. Registered domestic partner as to deposit account or safe deposit box standing in a fictitious name. Under CCP § 700.160(b)(3), as to a levy against a deposit account or safe deposit box standing in a fictitious business name, paragraph (3) is amended so that a court order is not required to levy on deposit account or safe deposit box standing in such name under the following:

(3) A fictitious business name, provided a copy of an unexpired statement certified in accordance with Section 17926 of the Business and Professions Code is delivered to the financial institution at the time of levy, the fictitious business name statement does not list any person other than the judgment debtor, the judgment debtor’s spouse or the judgment debtor’s registered domestic partner as the person or persons doing business under the fictitious business name, and, if a person other than the judgment debtor is listed in the statement, an affidavit stating that the other person is the judgment debtor’s spouse or registered domestic partner is delivered to the financial institution at the time of the levy.

13. Garnishee’s memorandum under attachment. With respect to the garnishee’s memorandum in response to a writ of execution and notice of levy, AB 2364 has incorporated the following amendments, similarly to a garnishee’s memorandum in response to a writ of attachment and notice of attachment.

a. Mandated content. Similarly to CCP § 488.610(b) mandating the content of a garnishee’s memorandum in response to a writ of attachment detailed above, CCP § 701.030 mandating the content of such memorandum in response to a writ of execution includes a new paragraph (7):

(7) A statement that the garnishee holds neither any property nor any obligations in favor of the judgment debtor.

b. Garnishnee’s memorandum under execution with central location. Similarly to CCP § 488.610(e) detailed above, CCP § 701.030(e) provides that where a deposit account or property in a safe deposit box is attached, the financial institution need not give a garnishee’s memorandum if the financial institution fully complies with the levy and if a garnishee’s memorandum is required, the memorandum need only provide information with respect only to property which is carried on the records available at the office or branch where the levy is made, unless the levy has been served at a central location designated by a financial institution in accordance with § 684.115, in which case the garnishee’s memorandum shall apply to all offices and branches of the financial institution except to the extent acceptance of the levy at that central location is limited pursuant to paragraph (3) of subdivision (a) of § 684.115.

14. Hearing on exemption. Under CCP § 703.570(a), the hearing on the motion for an exemption by the judgment debtor shall be held not later than 30 days from the date the notice of motion was filed with the court, rather than 20 days.

15. Notice of adverse claim. With regard to a notice of adverse claim served under Financial Code § 1450 against a bank, two key changes were made.

a. Definition of “is carried.” Notice of an adverse claim against a bank under Financial Code § 1450 against a deposit account or property in a safe deposit box has to be personally served on the office where the property is held or the deposit is carried. Under new subdivision (e), the phrase “office at which the deposit is carried” means the branch, office, or other location where the account containing the subject deposit is carried.

b. Service of an adverse claim to a central location. A new paragraph (f) is added to Financial Code § 1450 so that an adverse claimant may serve the notice of adverse claim or related affidavit, order, injunction, or other order contemplated by § 1450 at the central location designated under CCP § 684.115. If a central location has not but should have been designated by the bank, the adverse claimant may serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated by § 1450 at any branch of the institution located in this state.

c. Notice of adverse claim against a bank or company conducting a safety deposit business. Under Financial Code § 1620, a notice of adverse claim process is described for a bank’s safety deposit department or for a company conducting a safety deposit business. A new paragraph (e) is added to Financial Code § 1620 so that an adverse claimant may serve the notice of adverse claim or related affidavit, order, injunction, or other order contemplated by § 1620 at the central location designated under CCP § 684.115 by a bank or company. If a central location has not but should have been designated by the bank or company, the adverse claimant may serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated by section 1620 at any branch or office of the institution located in this state.

16. Employment Development Department notice of levy. The California Employment Development Department under Unemployment Insurance Code § 1755 may cause a notice of levy to be served by personal service or first class mail to collect delinquent obligations under the California Insurance Code. A new paragraph (b) is added to Unemployment Insurance Code § 1755 so that the director may cause the service of a notice of levy at the central location designated under CCP § 684.115 by a financial institution. Note that an EDD’s notice of levy is continuing levy, for up to one year from the date of receipt of the notice.


III. Conclusion

AB 2364 provides comprehensive changes to the process of serving legal process on financial institutions located in California. A financial institution should study carefully the benefits and drawbacks of designating a central location for the service of legal process on its branches and offices. Additionally, this bill makes various miscellaneous changes to the process associated with attachments and executions under California law meriting consideration and implementation.


The information contained in this CBA Regulatory Compliance Bulletin is not intended to constitute, and should not be received as, legal advice. Please consult with your counsel for more detailed information applicable to your institution.

© This CBA Regulatory Compliance Bulletin is copyrighted by the California Bankers Association, and may not be reproduced or distributed without the prior written consent of CBA.

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