DIVISION 19. RELEASE OF DEMAND DEPOSIT FUNDS [40500. - 40501.]

Cal. Financial Code - FIN 19.
in effect

Cal. Financial Code - FIN § 40500. Section 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.

Cal. Financial Code - FIN § 40501. Section 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.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026

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