Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

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
July 's Fed Bank's "FedFocus" has some interesting articles: incl cost/benefits of $1 currency 2 coin conversion ttp://tinyurl.com/nybmnhh
14 hours ago
Do you wish you were a News Now subscriber? Go here: http://t.co/7evfBSjeMx
14 hours ago
Financial education for student body key part of Altura #creditunion, UC-Riverside partnership #NewsNow http://t.co/Xp6OJd66o6
15 hours ago
.@VTcreditunions gains 200 new FB followers in just 2 wks to reach 1,000 http://t.co/I89xJcv4Jg
16 hours 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: http://t.co/yBRhlmdqHt
18 hours ago