WASHINGTON — The federal financial regulatory agencies (Agencies) today requested public comment on a proposed statement encouraging federally regulated financial institutions to follow best practices to protect federal benefit payments from garnishment orders.
Federal law protects federal benefit payments—such
as Social Security benefits, Supplemental Security Income
benefits, Veterans’ benefits, Federal Civil Service retirement
benefits, and Federal Railroad benefits—from garnishment orders
and the claims of judgment creditors subject to certain exceptions,
such as garnishment orders relating to alimony or child support
payments. The proposed statement lists best practices followed
by financial institutions in this area, invites suggestions on other
practices the agencies should consider, and encourages financial institutions to stay apprised of any future guidance issued by the Social Security Administration or Veterans Affairs regarding garnishment practices and of developments in the courts in their jurisdiction regarding garnishment practices.
The proposed statement, which was issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration, is attached.
Comment is requested by 60 days after publication in the Federal Register.
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