WASHINGTON (5/5/14)--Receiving depository financial institutions (RDFIs) are liable for all benefit payments received after the death of a recipient, unless they meet certain requirements, the Credit Union National Association clarified in a CompBlog post.
According to U.S. Treasury regulations, an RDFI will not be liable if it:
Credit unions should first determine the balance of a given account when it receives a notice of reclamation from the government. If there are insufficient funds, a partial payment should be remitted to the Government Disbursing Office that issued the reclamation, CUNA wrote.
The Treasury says financial institutions may not attempt to reclaim funds if all or part of post-death benefit payments have been withdrawn from an account. "If the RDFI does so, it acts under its own authority in terms of its contract with its depositor or under state law," according to the agency.
For the full CompBlog post, use the resource link.