Banks Fees Improper for|Cache of Child Actors’ Funds

     (CN) – The parents or guardians of showbiz kids must cover the fees banks charge to service the protected accounts of those minors, a California appeals court found.
     California’s protections for the bank accounts of children in the entertainment industry date back to the passage of the Coogan Law in 1938, after “Addams Family” actor Jackie Coogan turned 18 and found himself flat broke. Though he had earned millions as a child actor, his mother and stepfather spent all of his money.
     Under the law, employers of child actors in California, New York, Louisiana and New Mexico must deposit 15 percent of the child’s gross earnings into a “Coogan” trust account within seven days of their employment.
     A parent or guardian is named trustee, and account withdrawals are prohibited until the actor turns 18 or is emancipated.
     Noticing that Bank of America was charging service fees on two such Coogan accounts, the trustees for two child actors, Alex Gonzales and Jadon Monroe, filed a class action last year in Los Angeles Superior Court.
     Bank of America claimed that its fees are not the same as withdrawals and that federal law guaranteeing the ability of national banks to charge fees pre-empts any state laws barring fees.
     Judge John Shepard Wiley Jr. dismissed the case against Bank of America, but a three-justice panel for the Second Appellate District reversed Monday.
     “When a bank debits an account, it necessarily withdraws money from that account,” Justice Richard Mosk wrote for the panel.
     Side-stepping the bank’s federal preemption claim, Mosk noted that the “plaintiffs’ claims are premised on the theory that withdrawing account service fees from the Coogan Trust Accounts without court approval is inconsistent with the accounts being Coogan Trust Accounts.”
     “Plaintiffs do not challenge defendant’s right to ‘charge’ the fee,” he added.
     Banks should apply the charges to the accounts held by the parents or guardians of child actors, and can come from the other 85 percent of the children’s wages, according to the ruling.
     And if the parents, guardians or banks want the fees to be applied to a specific Coogan account, they can petition the court for approval.

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