Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CUNA concerned by Treasurys garnishment review requirements
WASHINGTON (6/21/10)--Credit Union National Association (CUNA) on Friday said that credit unions have serious concerns with a U.S. Treasury proposal that would implement statutory restrictions on the garnishment of federal benefit payments. The Treasury, the Social Security Administration, the Department of Veterans Affairs, the Railroad Retirement Board, and the Office of Personnel Management issued the proposal in April. The agencies said that the rule was a response to "recent developments in technology and debt collection practices that have led to an increase in the freezing of accounts containing federal benefit payments." Specifically, the Treasury proposal would “establish procedures that financial institutions must follow when a garnishment account order is received for an account in which there is a direct deposit of Federal benefit payments,” CUNA said. This would include requiring institutions to review the account history during the 60-day period prior to the receipt of the garnishment order. According to CUNA, many credit unions lack the data processing capability to conduct these reviews and would be distracted from their true goal of serving their members if the proposal became law. Credit unions that have the data processing capabilities necessary to execute these reviews “may not have the capability to review a 60-day historical period,” CUNA added. CUNA has suggested that the Treasury modify its rules by allowing financial institutions to “use a flat amount that the account holder would have access to, such as the lesser of $2,200 or the balance in the account,” rather than imposing an across the board 60-day review requirement. The $2,200 figure was considered by the agencies as a possible alternative to the proposal, although they did not indicate how this thresold was determined. CUNA in the comment letter also spoke in support of portions of the proposal that would not require financial institutions to undertake additional reviews if funds are transferred from a primary to a secondary account. For the full comment letter, use the resource link.

RSS print
News Now LiveWire
July 's Fed Bank's "FedFocus" has some interesting articles: incl cost/benefits of $1 currency 2 coin conversion ttp://
1 Day ago
Do you wish you were a News Now subscriber? Go here:
1 Day ago
Financial education for student body key part of Altura #creditunion, UC-Riverside partnership #NewsNow
1 Day ago
.@VTcreditunions gains 200 new FB followers in just 2 wks to reach 1,000
1 Day ago
.@CUNA is testifying on reg relief Tues,July 15 at 2 p.m. be4 Hs Fin Serv Subc. Here is the agenda and witness list:
1 Day ago