Financial Institutions and Markets

Contact: Heather Morris; Spencer Fane Britt & Browne LLP (Missouri, USA)

We frequently receive questions from banks regarding garnishments, particularly in response to recent changes in applicable regulations. To assist banks with such questions, the Office of the Comptroller of the Currency recently issued the "Garnishment of Accounts Containing Federal Benefit Payments" booklet.

The booklet sets forth the procedures that banks must follow with respect to the garnishment of certain federal benefit payments that are directly deposited. The procedures are in response to the final interim rule adopted on May 29, 2013, by the Bureau of the Fiscal Service, U.S. Department of the Treasury; Social Security Administration; U.S. Department of Veterans Affairs; U.S. Railroad Retirement Board; and U.S. Office of Personnel Management. As you are likely aware, the rule was effective June 28, 2013.

 

We recommend that you carefully review the new garnishment booklet, along with your bank’s current procedures for compliance. You can find a copy of the new booklet here.