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SB 173

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

2026 Regular Session Introduced by Jay Morris

Garnishment of bank funds by federally insured institutions allows immediate transfer to the sheriff for deposits ≤ $1,000 or after a 30-day wait for deposits > $1,000, with no opp

Effective date 8/1/2026.
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WeVote Research Nonpartisan
Bill Summary · SB 173

Summary of Louisiana Senate Bill 173 (2026) – Civil Procedure: Garnishment Process for Banks

Jurisdiction: Louisiana
Session: 2026
Status: Engrossed and enacted; effective August 1, 2026

1. Purpose and Intent

  • The bill updates the garnishment process for funds held by federally insured financial institutions (banks) that are in possession of funds on deposit belonging to a judgment debtor.
  • It preserves the existing framework requiring garnishees to deliver property or pay indebtedness to the sheriff, but adds a streamlined, bank-specific mechanism for small and certain large deposits.

2. Key Provisions and Changes

A. Amendments to Article 2415(B)

  • Current Law (baseline): Garnishee must deliver property or pay indebtedness to the sheriff immediately when certain conditions are met; delivery to the sheriff discharges the garnishee’s obligation.
  • New Provision for Federally Insured Financial Institutions:
    • If the garnishee admits in its answer that it holds funds on deposit belonging to the judgment debtor, and there is no opposition notice, the following applies:
    • Funds on deposit ≤ $1,000: The garnishee may deliver the funds immediately to the sheriff without further court order.
    • Funds on deposit > $1,000: The garnishee may deliver the funds to the sheriff after a 30-day waiting period, without further court order.
    • In both cases, delivery or payment to the sheriff discharges the garnishee’s obligation to the judgment debtor to the extent of the delivered amount.

B. New Articles for Garnishment Process (C.D)

  • Article 2415(C): Provides the framework for delivery of funds to the sheriff after the 30-day period if the amount exceeds $1,000, applicable only when the garnishee is a federally insured financial institution and there is no opposition.
  • Article 2415(D): Explicitly notes that the provisions do not apply to garnishment of wages, salaries, tips reported to the employer, or commissions. (This maintains existing protections for wage garnishments.)

3. Affected Parties

  • Garnishees: Federally insured financial institutions (e.g., banks) that possess funds on deposit belonging to a judgment debtor.
  • Judgment Debtors: Individuals or entities with funds on deposit at a garnishee that are subject to garnishment.
  • Sheriffs: Receivers of funds delivered by garnishees under the garnishment process.
  • Opposition Notice Receivers: Parties may file opposition to garnishment; these provisions apply only if no opposition is filed.

4. Procedural and Timeline Aspects

  • Effective Date: August 1, 2026.
  • For deposits ≤ $1,000:
    • If admitted garnishment and no opposition, the garnishee can immediately deliver funds to the sheriff.
  • For deposits > $1,000:
    • If admitted garnishment and no opposition, the garnishee can deliver funds to the sheriff after a 30-day waiting period.
  • Wages and salary garnishments remain governed by existing wage-specific protections (not covered by these new provisions).

5. Practical Impact

  • Streamlined process for small-bank garnishments: Quick transfer of funds when deposits are small, reducing delay for judgment creditors.
  • Moderate delay for larger bank deposits: A 30-day window provides time to review the garnishment before funds are transferred.
  • Clarity for financial institutions: Establishes explicit rules for delivering funds to sheriffs in cases involving federally insured banks.
  • Wage garnishments remain unaffected in this particular framework (no change to wages, salaries, tips, or commissions garnishments).

6. Notable Details

  • The changes apply specifically to federally insured financial institutions.
  • The bill explicitly states that the delivery to the sheriff discharges the garnishee’s obligation to the judgment debtor to the extent of the delivered amount.
  • The act does not alter the underlying requirement to deliver property immediately in other non-bank scenarios or when opposition is timely filed.

If you’d like, I can provide a concise one-page briefing or a side-by-side comparison of current law vs. SB 173 for quick reference.

Compiled from official sources — confirm details with the bill’s official record.

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