The answer can take two forms depending on whether the bank is state chartered or federally chartered. Many years ago, when most banks were state chartered, their funds were held at the branch level. As a result, a judgment creditor's levy had to be branch-specific. Specifically, Commercial Code § 4107 provides that "A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notice or orders shall be given under this division and under Division 3 (commencing with Section 3101)."

But in the mid to late 1980s, the banking industry went through major changes, with many banks consolidating or merging. In response, in 1994, Congress passed the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (IBBEA) which was codified to 12 U.S.C. § 1811, which in general was designed to make branch banking more efficient by nationalizing the process for national banks, and regulating state chartered banks that wanted to expand to different host states. As result, national banks went to a state depository framework, with each state having its own depository network, and a levy within the state would capture all accounts in every branch within that State.

In 2004, The Department of the Treasury issued Regulation 12 C.F.R. 7.4007, which authorized national banks to take deposits without regard to state law. Therefore many national banks have created a single depository framework, rather than dividing the accounts into a patchwork of 50 depositories. As part of that process, many banks inserted into its account agreement a provision which allows the bank to maintain a single set of books and to honor levies on a national basis. As explained to me by a national bank, the bank "does not maintain 50 mattresses, one for each state, each with money in it. Rather, it maintains a single mattress for the entire bank."

What if your judgment debtor uses a state chartered bank with locations in different states, including the state where the judgment was entered? While not universally held, courts have determined that a bank does not have physical custody of a depositor's money at a particular site.

Instead, a general deposit into a bank account creates a debt owed by the bank to the depositor. As a result, the judgment creditor can assert that it is the receivable owed by the bank that is being collected, not the actual funds, that provides the basis for recovery.

In the end, we ask, do the outcomes described above make common sense? The fact that Congress authorized the Department of the Treasury to allow national banks to do the same is sound in today's national, if not global, economy. Additionally, the principle that the corporation could do business across state lines, but insulate itself from a single levy makes little sense.

Critics may argue that the judgment debtor's account is physically located in its home state where it was opened, and the garnishment should not reach the funds in the account. Those same critics may assert that the judgment creditor should simply domesticate the judgment in the judgment debtor's home state pursuant to full faith and credit, and garnish in that state. In practice, however, in most states the judgment debtor would have notice of the domestication and be afforded an opportunity to move the funds before the garnishment took place. In the end, whether using the theory of a single depository or a bank receivable, judgment creditors and the overburdened legal system are benefited by the ability to garnish against a bank with locations in their home state.