Kruger v. Wells Fargo Bank

Opinion

TOBRINER, J.

In this case we hold that a bank’s setoff of charge account debts against a depositor’s checking account constitutes private action, not state action, and thus does not succumb to the requirements of procedural due process under the federal Constitution. We also hold that the reach of the due process clause of the state Constitution is insufficient to afford a remedy to depositors. We conclude, however, that a bank may not exercise its right of setoff against deposits which, derived from unemployment and disability benefits, are protected from the claims of creditors.

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