Lopez

Opinion by Judge HAWKINS; Concurrence by Judge NOONAN.

We must decide whether the statutory protections afforded Social Security and Supplemental Security Income (“SSI”) beneficiaries are offended by a bank’s practice of using directly deposited Social Security and SSI benefits to cover overdrafts and overdraft fees. We must also decide whether plaintiffs’ related state law claims are preempted by Office of Thrift Supervision (“OTS”) regulations.

FACTS AND PROCEDURAL HISTORY

The facts of this case are not extremely complex. Each of the named plaintiffs 1 receive Social Security and/or SSI benefits. Each had an account with Washington Mutual, and their benefits were directly deposited into these accounts. At the time the plaintiffs opened their accounts with Washington Mutual and/or its predecessors-in-interest, they executed account agreements which included provisions re *993 garding overdrafts. Though differing in specific language, the agreements generally explained that if an account holder had insufficient account funds to pay a check, the bank had the option of rejecting the check or paying the check, creating an overdraft on the account accompanied by an overdraft fee.…

concurring.

The opinion of the court is faithful to the Social Security Act and the relevant precedents. Recipients of Social Security who depend on their checks for necessities are protected. Who could dissent? Nonetheless, this fidelity to the law produces a result that is not happy. As Judge Trott observed in an analogous case, Crawford v. Gould, 56 F.3d 1162, 1169 (9th Cir.1995), the answer to the problem created by the Social Security Act and precedent lies with Congress.

The policy embodied in § 407(a) of the Social Security statute conflicts with another policy encouraging direct deposit that has received energetic support from the federal government in recent years. Congress, indeed, has mandated direct deposit for all federal wage, salary, and retirement payments. 31 U.S.C. § 3332 . Although the requirement in particular cases may be waived, the desire of Congress to make the practice general is unmistakable. Direct deposits are a convenience to the bank customers and mean an elimination of paperwork for the federal government and the bank, as well as the elimination of the problems created by lost or stolen checks or forged signatures. It is regrettable that the two…