SECTIONS 40500-40501 - California Statutes

FINANCIAL CODE

SECTION 40500-40501

40500. It is the intent of the Legislature that a financial
institution shall not transfer funds from a depositor's account
unless authorization has been granted by that depositor. This
division is declaratory of existing case law and is intended to
codify the law for the convenience of the public, regulatory
authorities, and financial institutions.

40501. In accordance with the implied contract existing between a
financial institution and its depositor, no bank, savings
association, credit union, or other financial institution operating
in this state which maintains and services demand deposit accounts,
including NOW accounts, may release any funds from those accounts to
any person or entity who is not the account holder, unless the funds
are released pursuant to the depositor's authorization or in
accordance with the law. This section does not apply to any setoff
for a debt claimed to be owed to a bank, savings association, credit
union, or other financial institution by a customer.