Cal. Fin. Code § 1411

(a) For the purposes of this section:
1. (1) “Customer” means one or more natural persons.
2. (2) “Debt” means an interest-bearing obligation or an obligation which by its terms is payable in installments, which has not been reduced to judgment, arising from an extension of credit to a natural person primarily for personal, family, or household purposes, and does not mean a charge for bank services or a debit for uncollected funds or for an overdraft of an account imposed by a bank on a deposit account.
(b) A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof.

(c) Not later than the day following the exercise of any setoff with respect to a deposit account for any debt claimed to be owed to the bank by a customer, the bank shall deliver to each customer personally or send by first-class mail postage prepaid to the address of each customer as shown on the records of the bank a written notice in at least 10-point type containing the following:

(1) A statement that the bank has set off a debt or a portion thereof against the customer’s deposit account, identifying the account, and giving the respective balances before and after the setoff.
(2) A statement identifying the debt set off against the account and giving the respective balances due before and after the setoff.
(3) A statement that if the customer claims that the debt has been paid or is not now owing, or that the funds in the deposit account consist of moneys expressly exempt pursuant to Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, and listed in the notice, the customer may execute and return the notice to the bank by mail at the address shown or personally to the bank branch where the customer’s account is maintained not later than 20 days after the date of mailing or personal delivery.
(4) A statement that if the notice is executed and returned, the bank may file an action in court to collect the debt; that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend; and that if the bank is successful, the customer will be liable for court costs, and attorney’s fees, if the debt so provides.

(5) A response form in at least 10-point type containing substantially the following:

“The debt described in the Notice of Setoff received from the bank is ____ is not ____ my debt or the debt of another person in whose name the account is maintained. “I claim that the debt:
	has been paid.
	is not now owing.
	is not subject to setoff because the money in the account is:
		Paid earnings (CCP 704.070)
		Proceeds from execution sale of or insurance for loss of a motor vehicle (CCP 704.010)
		Proceeds from execution sale of household furnishings or other personal effects (CCP 704.020)
		Relocation benefits (CCP 704.180)
		Life insurance proceeds (CCP 704.100)
		Disability and health insurance benefits (CCP 704.130)
		Workers’ compensation benefits (CCP 704.160)
		Unemployment or strike benefits (CCP 704.120)
		Retirement benefits including, but not limited to, social security benefits (CCP 704.080, 704.110, 704.115)
		Public assistance benefits including welfare payments and supplemental security income (SSI) or charitable aid (CCP 704.170)
		Proceeds from sale of or insurance for damage or destruction of a dwelling (CCP 704.720, CCP 704.960)
		Proceeds from execution sale of or insurance for loss of tools of a trade (CCP 704.060)
		Award of damages for personal injury (CCP 704.140) or wrongful death (CCP 704.150)
		Financial aid paid by an institution of higher education to a student for expenses while attending school (CCP 704.190)
“I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Date:	Signed: ”
	(Customer)

(d) If the response form described in subdivision (c) executed by the customer is received by the bank not later than 20 days after the date of mailing or personal delivery of the written notice, the amount of the setoff for any debt claimed to be owed to the bank by a customer, and any bank service charges resulting from the setoff, shall be reversed and such amount shall be credited to the deposit account not later than the end of the business day following receipt of such executed response form.
(e) The limitations provided in this section do not apply to a deposit account, other than a demand deposit account, in which the bank has a security interest expressed by a written contract as collateral for the debt owing to the bank by the customer.
(f) The limitations provided in this section do not apply when a customer previously has authorized a bank in writing to periodically debit a deposit account as the agreed method of payment of the debt.
(g) The limitations provided in this section shall apply only to the exercise by a bank a setoff with respect to debts claimed to be owing to it by customers on or after July 1, 1976.
(h) Nothing in this section shall prejudice a person’s right to assert exemptions under Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, or to assert a claim or defense as to the validity of the debt, in a judicial proceeding.