Cal. Fin. Code § 6660

(a) For the purposes of this section:
1. (1) “Account” means withdrawable or repurchasable shares, investment certificates, deposits, or savings accounts as defined in Section 561.2, 561.16, 561.28, 561.29, 561.42, or 563.6 of Title 12 of the Code of Federal Regulations pursuant to which the account holder from time to time may make deposits and effect withdrawals.
2. (2) “Account holder” means a person who is identified on the signature card for an account, or in the absence of a signature card, a person who has an interest in an account which is reflected on the records of the association for that account to whom statements of account or other notices are normally given, or the agent of such person.
3. (3) “Charges” means those charges which an association may, from time to time, impose on an account in the normal course of business in the operation of the account and, does not include:
  1. (A) Charges which may be imposed for extraordinary services furnished at the specific request of the account holder.
  2. (B) Charges or amounts required to be disclosed to the depositor pursuant to the Truth-in-Lending Act (15 U.S.C. Sec. 1601 et seq.) and Regulation Z (12 C.F.R. 226.1 et seq.), as amended.
4. (4) “Customer” means one or more natural persons.
5. (5) “Debt” means an interest-bearing obligation or an obligation that 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 savings and loan services, for a debit for uncollected funds, for dishonored checks cashed for a customer, or for an overdraft account imposed by an association on a savings account.
(b) An association is limited in exercising any setoff for a debt claimed to be owed to the association 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 association for all accounts maintained by a customer with the association or any of its branches.

(c) Not later than the day following the exercise of any setoff with respect to an account for any debt claimed to be owed to the association by a customer, the association 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 association a written notice in at least 10-point type containing the following:

(1) A statement that the association has set off all or part of a debt against the customer’s account, identifying the account, and giving the respective balances before and after the setoff.
(2) A statement identifying the debt setoff 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 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 association by mail at the address shown or personally to the 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 (A) if the notice is executed and returned, the association may file an action in court to collect the debt, (B) that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend, and (C) that if the association 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 savings and loan association 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 (CCP704.180)
		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, 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 that the foregoing is true and correct.
Executed at City or County , California on Date
Signed: ”

(d) If the response form described in subdivision (c) executed by the customer is received by the association 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 association by a customer, and any service charges resulting from the setoff, shall be reversed and shall be credited to the customer’s account not later than the end of the third business day following receipt of the executed response form.
(e) The limitations provided in this section do not apply to accounts in which the association has a security interest expressed by a written contract as collateral for the debt owing to the association by the customer.
(f) The limitations provided in this section do not apply when a customer previously has authorized an association in writing to periodically debit an account as the agreed method of payment of the debt.
(g) The limitations provided in this section shall apply only to the exercise by an association of 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.