The agreement states that customers are immediately responsible for repaying overdrafts plus fees and interest, that Chase may report overdrawn accounts to consumer reporting agencies and close the account, and that subsequent deposits including Social Security and other federal benefit payments are authorized to be applied to overdraft repayment.
This analysis describes what Chase's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The authorization to apply Social Security and federal benefit payment deposits to overdraft repayment intersects with federal protections under 31 C.F.R. Part 212, which governs the treatment of certain benefit payments in garnishment contexts. The CFPB has previously examined bank practices related to applying benefit payments to overdraft repayment; the agreement explicitly states that customers may change their direct deposit instructions to avoid this application.
Under this provision, Chase may apply all subsequent deposits, including Social Security and other federal benefit payments, to repay an overdraft balance. The agreement states that customers may change direct deposit instructions with the paying organization at any time if they do not want benefit payments applied to overdraft repayment. Chase may also report overdrawn accounts to consumer reporting agencies, which may affect future account-opening eligibility.
Cross-platform context
See how other platforms handle Overdraft Responsibility and Consumer Reporting Agency Reporting and similar clauses.
Compare across platforms →"It's your responsibility to avoid overdrawing your account. You must immediately pay the amount of any overdraft together with any applicable fees or interest. Until you pay such balance in full, you will pay fees or interest on the amount of the overdraft at the rate indicated on the applicable fee schedule. We also may report you to consumer reporting agencies, close your account, or both. These actions could affect your ability to open accounts in the future. You authorize us to use the money from any subsequent deposits to your account (including, but not limited to, a direct deposit of Social Security or any other state or federal benefit payment) to pay any overdraft and resulting fees or interest.Excerpt from Chase's Deposit Account Agreement
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The authorization to apply Social Security and federal benefit payment deposits to overdraft repayment intersects with federal protections under 31 C.F.R. Part 212, which governs the treatment of certain benefit payments in garnishment contexts. The CFPB has previously examined bank practices related to applying benefit payments to overdraft repayment; the agreement explicitly states that customers may change their direct deposit …
Under this provision, Chase may apply all subsequent deposits, including Social Security and other federal benefit payments, to repay an overdraft balance. The agreement states that customers may change direct deposit instructions with the paying organization at any time if they do not want benefit payments applied to overdraft repayment. Chase may also report overdrawn accounts to consumer reporting agencies, …
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