Legal Process Fees at the Big Banks

Adam Rust

Resource – A list of legal process fees at the nation’s largest banks:

Many banks charge legal process fees when they receive a request to pay a legally-ordered item. Examples would include wage garnishments, tax liens, injunctions, and subpoenas.

Bank of America charges a “legal process fee” of $125.

Wells Fargo applies the same fee, but they cap the costs at $250 per month.

BB&T has the same policy as Bank of America.

• As does Citibank - $125:  

• PNC Bank and Comerica Bank charge a fee of $100 to any withdrawal subject to a legal process

• However, Fifth Third only charges $80.

• Processing of garnishments and other legal payment orders cost $75 at JPMorgan Chase.

The right account will have a lower charge for all legal process orders.

About debt collection on funds deposited to prepaid debit cards

Officially, debt collectors can garnish funds deposited to a prepaid debit card.

However, it less likely that they will be able to garnish. Why? Because of differences in how prepaid debit cards work.

When you deposit funds to a prepaid debit card, the bank places them in a select group account referred to as a “pooled account.” It is a difference that matters not to most consumers, and in fact, few probably know that it is going on. Funds held in pooled accounts receive an alternative form of FDIC insurance. It is called “pass-through” insurance.

Second, banks do not check credit when they decide to approve or reject an application. They don’t check credit because they are not extending credit. True, a regular checking account is not a credit card, but it can become a credit vehicle if the account owner overspends and then the bank has to try to collect the overage.

The important thing to take away from this post is that some bank accounts charge exorbitant fees to process court-ordered payments. Not all consumers need the same bank account, as not every consumer has the same use cases for an account. Any individual with a garnishment – be it someone who recently exited prison as well as those who have never been involved with our justice system – should pay attention to how a bank charges for garnishments.

Note: Protection from garnishment is contextual and not an actual legal construct. Debt collectors can still garnish these accounts. If you tell the debt collector, then they will place a garnishment. Moreover, I am not a lawyer; you should not rely on these comments as a substitute for consulting a lawyer, and I am not endorsing any effort at avoiding your legal obligations.

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Adam Rust has worked to defend consumers against harmful financial practices since 2005. He has written extensively about overdraft fees, payday lending, credit insurance, student loans, prepaid debit cards, high-cost installment loans, and subprime mortgage lending. The New York Times interviewed him when it reported on the CFPB's rulemaking on prepaid debit cards; subsequently, his research paper framed the debate on consumer protections.

He serves on the Board of the US Faster Payments Council. He is Director of Research at Reinvestment Partners in Durham, North Carolina. He is the author of BankTalk. He is the author of "This is My Home: Challenges and Opportunities of Manufactured Housing" and has testified to Congress on how to redress some of the problems with manufactured housing. See more on his LinkedIn profile.