Developing Written Procedures for Handling Third Party Claims for Customer Funds

Recorded on June 26, 2014   |   With Ken Golliher

Developing Written Procedures for Handling Third Party Claims for Customer Funds

With Ken Golliher
  • 1 Video
  • 4 PDFs
  • 2.0 hrs
Course description

This webinar was last offered by BOL in 2011. It shows one method for developing written procedures for handling claims on customer information and funds; e.g. levies, garnishments, subpoenas, etc. Materials contain sample procedures which individual institutions can adapt to reflect the laws in their state and the processes used by their institution. Examples are based on the handling of IRS levies and summons which are uniform for all attendees. Neither the presentation nor the Q & A sessions address the laws of a particular state. Again, program content focuses on developing procedures for handling claims, not on the claims themselves.


Financial institutions processing third party claims for funds have always walked a strict liability tightrope for any processing errors they made. Yet, difficult economic times have boosted the number of levies and garnishments received by all institutions. Recently adopted federal regulations now impose on financial institutions an additional responsibility to create a "side-track" mechanism to look for federal benefit payments and, where appropriate, establish a protected amount that is not subject to garnishment. Another recent development is that federal examiners will begin reviewing compliance efforts in this area, something they have never done before.

At the same time, third party claims for information have become more frequent as well as sophisticated and demanding of secrecy; e.g. national security letters. Financial institutions must consider customer information as they would any other asset; i.e. they give it away under the appropriate circumstances and pursuant to strict internal controls. Two Interagency memoranda direct financial institutions to develop formal processes for dealing with requests for information from law enforcement agencies whether those requests are formal or informal.


  • Sample policy
  • Sample procedures
  • Sample log for tracking claims
  • Recording receipt of the claim
  • Establishing an internal chain of custody
  • Verifying a customer relationship
  • Identifying exempt property
  • Identifying available funds
  • Identifying information the financial institution is required to deliver
  • Responding to the claim
  • Maintaining records


The program is designed for individuals who are responsible for responding to third party claims for customer funds and information. It will also be helpful for those responsible for auditing this area of responsibility. Attendees are expected to be familiar with the relevant legal requirements in their state. The program does not incorporate the laws of any state; questions regarding state law will not be addressed.

Course Curriculum

Developing Written Procedures for Handling Third Party Claims for Customer Funds Including Garnishments & Levies
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FDIC Exam Procedures - Garnishment of Accounts
Questions and Answers
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Ken  Golliher
Ken Golliher

Ken is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced banker with a unique ability to reduce complex legal concepts to plain English. He has explained the "why" and "how" of regulations to thousands of financial institution personnel and examiners. Ken's banking career began in 1972 and includes serving as a teller, commercial operations manager and as trust department legal counsel in a state and a national bank. For ten years he headed the education division of a regional consulting firm for financial institutions. He has served on the faculty of the LSU Graduate School of Banking, the OTS' Level I Compliance School and the FDIC's Advanced Consumer Protection school for examiners. He has presented seminars in more than 25 states and has served as an instructor at compliance schools sponsored by the Illinois, Indiana, Iowa, Georgia, Kansas, Kentucky, Nebraska, Oklahoma, Pennsylvania and Texas bankers associations. He is a member of the Society for Applied Learning Technology. He is also a "BOL Guru."