WASHINGTON–On the eve of a Senate Finance Committee hearing held today, the federal financial regulatory agencies yesterday issued a request for public comment on a statement encouraging federal financial institutions to follow best practices to guard against garnishment of protected federal benefit payments.
|Federal law prohibits garnishment of federal benefit payments, such as Social Security and veterans' benefits, for garnishment orders. Among the best practices proposed when a garnishment or is received were to notify the consumer promptly when the order is received and a freeze is placed on the account; provide information on the exempted federal benefits; promptly determine is an account contains only exempt funds; and notify the collector or court that the account contains protected funds, among other things.
|NCUA and the other federal financial regulators issued the proposed guidance with a 60-day comment period.
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