Provides for the garnishment process for banks. (8/1/26)

Senate Bill 173 amends Code of Civil Procedure Article 2415 to create expedited procedures for garnishing deposits held by federally insured financial institutions. The bill adds two new paragraphs that allow banks and credit unions to deliver garnished funds to the sheriff without waiting for a court order in certain circumstances. For deposits of one thousand dollars or less, a federally insured financial institution may deliver the funds immediately to the sheriff after admitting in its garnishment answer that it holds the funds, provided no notice of opposition has been filed. For deposits exceeding one thousand dollars, the institution must wait thirty days after filing its answer before delivering the funds to the sheriff, again without requiring additional court authorization. The bill also adds a carve-out stating that these expedited procedures do not apply to wage garnishments, which remain subject to separate garnishment rules.

The practical effect of this legislation is to streamline the garnishment process for creditors and judgment creditors seeking to satisfy debts owed by judgment debtors who maintain deposits in federally insured financial institutions. Banks and credit unions will now have clear statutory authority to release customer deposits to law enforcement without incurring further liability to their depositor customers, reducing administrative burden and delays in the collection process. The thirty-day waiting period for larger deposits provides a reasonable interval during which judgment debtors or interested parties can file opposition to the garnishment before the funds are surrendered, protecting against improper or disputed garnishments while still enabling relatively prompt resolution. Creditors benefit from faster access to funds, while financial institutions gain certainty about their duties and timing obligations under garnishment orders.

Senate Bill 173 operates within Louisiana's civil procedure framework for debt collection and enforcement of money judgments. Code of Civil Procedure Article 2415 has long provided that garnishees must deliver property or pay indebtedness to the sheriff when the garnishee admits possession of the judgment debtor's property or indebtedness to the judgment debtor. This bill preserves that core obligation while creating an exception specifically for federally insured financial institutions, a category that includes banks chartered under federal law and savings and loan associations subject to federal insurance requirements. The restriction on wage garnishments in new Paragraph D acknowledges that federal and state law impose special protections on wage garnishments under the Consumer Credit Protection Act and related statutes, requiring those garnishments to follow distinct procedures. The bill becomes effective August 1, 2026, allowing courts and financial institutions time to implement the new procedures.