Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
Final Garnishment Rule Is Out, Clarifies Proposal
WASHINGTON (5/31/13)--As of June 28, a new final rule issued by the U.S. Treasury Department and several other federal agencies will establish procedures that credit unions must follow when they receive a garnishment order against an account holder who receives certain federal benefit payments by direct deposit.

The rule requires financial institutions that receive such a garnishment order to determine the sum of the federal benefit payments deposited to the account during a two-month period, and then to provide the account holder access to funds equal to that amount or to the current balance of the account, whichever is lower.

Within three business days of completing the account review, the financial institution must send a notice to the account holder informing that a garnishment order has been received, and provide a succinct explanation of garnishment, and include other information about the member's or customer's rights.  However, the final rule was revised to only require a notice to a member in cases where there are funds in the account in excess of the protected amount.

Credit unions have been complying with an interim final rule since May 1, 2011 and this final rule clarifies several issues. For instance, the issuing agencies continue to believe that financial institutions should not be permitted to collect a fee from the protected amount.  However, they did amend the rule to provide financial institutions with an opportunity, for five days following the account review, to impose a garnishment fee in the event that non-protected funds become available following the account review.

Also, the definition of "garnishment order" was revised to include orders or levies issued by a state or state agency or municipality. Levies issued by state revenue departments are now clearly subject to the rule.

For more on the garnishment rule, access the Federal Register document via the resource link below.
Other Resources

Final Rule
RSS





print
News Now LiveWire
Final field-of-membership rule tops April 30 NCUA agenda http://t.co/gFIhRhUCts
17 hours ago
.@CUNA's @Nussle speaks to @VonnieQuinn about #StoptheDataBreaches and reg. relief. http://t.co/TMTubG9Afk
19 hours ago
RT @NCUFoundation: .The Foundation's @hylandhighway with @NatlJumpStart President/CEO Laura Levine at #FLHillDay2015 today: http://t.co/ep5…
21 hours ago
Seriously underwater homes rise, new-home sales tumble News Now: http://t.co/2LzWTkqnES
21 hours ago
#NewsNow Cornerstone Foundation awards $71K in grants http://t.co/Y6D8K9rwWv
23 hours ago