68956 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Rules and Regulations 

(a) Evidence that the species is 

distributed throughout its potential 

range or has spread too far to implement 

effective control. 

(b) Evidence that control efforts have 

been unsuccessful and further efforts are 

unlikely to succeed. 

(c) For cultivars of a listed noxious 

weed, scientific evidence that the 

cultivar has a combination of risk 

elements that result in a low pest risk. 

For example, the cultivar may have a 

narrow habitat suitability, low dispersal 

potential, evidence of sterility, inability 

to cross-pollinate with introduced wild 

types, or few if any potential negative 

impacts on the economy or environment 

of the United States. 

(d) List of references. 

PART 361—IMPORTATION OF SEED 

AND SCREENINGS UNDER THE 

FEDERAL SEED ACT 

■ 21. The authority citation for part 361 

continues to read as follows: 

Authority: 7 U.S.C. 1581–1610; 7 CFR 

2.22, 2.80, and 371.3. 

■ 22. In § 361.6, paragraph (a)(1) is 

amended as follows: 

■ a. By removing the entries for 

‘‘Caulerpa taxifolia (Mediterranean 

clone)’’, ‘‘Homeria spp.’’, and ‘‘Mimosa 

invisa Martius’’. 

■ b. By revising the entries for ‘‘Digitaria 

abyssinica (=D. scalarum)’’, ‘‘Drymaria 

arenariodes Humboldt & Bonpland ex 

Roemer & Schultes’’, ‘‘Imperata 

cylindrica (L.) Raeuschel’’, ‘‘Mikania 

micrantha Humboldt, Bonpland, & 

Kunth’’, ‘‘Prosopis farcta (Solander ex 

Russell) Macbride’’, ‘‘Prosopis pallida 

(Humboldt & Bonpland ex Willdenow) 

Humboldt, Bonpland, & Kunth’’, 

‘‘Setaria pallide-fusca (Schumacher) 

Stapf & Hubbard’’, and ‘‘Spermacoce 

alata (Aublet) de Candolle’’ to read as 

set forth below. 

■ c. By adding, in alphabetical order, 

entries for ‘‘Acacia nilotica (Linnaeus) 

Wildenow ex Delile’’, ‘‘Ageratina riparia 

(Regel) R.M. King and H. Robinson’’, 

‘‘Arctotheca calendula (Linnaeus) 

Levyns’’, ‘‘Euphorbia terracina 

Linnaeus’’, ‘‘Inula britannica Linnaeus’’, 

‘‘Mimosa diplotricha C. Wright’’, 

‘‘Moraea collina Thunberg’’, ‘‘Moraea 

flaccida (Sweet) Steudel’’, ‘‘Moraea 

miniata Andrews ‘‘, ‘‘Moraea ochroleuca 

(Salisbury) Drapiez’’, ‘‘Moraea pallida 

(Baker) Goldblatt’’, ‘‘Onopordum 

acaulon Linnaeus’’, and ‘‘Onopordum 

illyricum Linnaeus’’. 

§ 361.6 Noxious weed seeds. 

(a) * * * 

(1) * * * 

Digitaria abyssinica (Hochstetter ex A. 

Richard) Stapf 

* * * * * 

Drymaria arenariodes Humboldt & 

Bonpland ex J.A. Schultes 

* * * * * 

Imperata cylindrica (Linnaeus) Palisot 

de Beauvois 

* * * * * 

Mikania micrantha Kunth 

* * * * * 

Prosopis farcta (Banks & Solander) 

J.F. Macbride 

* * * * * 

Prosopis pallida (Humboldt & 

Bonpland ex Willdenow) Kunth 

* * * * * 

Setaria pumila (Poir.) Roem. & Schult. 

subsp. pallidefusca (Schumach.) B.K. 

Simon 

* * * * * 

Spermacoce alata Aublet 

* * * * * 

Done in Washington, DC, this 4th day of 

November 2010. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 2010–28346 Filed 11–9–10; 8:45 am] 

BILLING CODE 3410–34–P 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part 1208 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

Office of Federal Housing Enterprise 

Oversight 

12 CFR Part 1704 

RIN 2590–AA15 

Debt Collection 

AGENCY: Federal Housing Finance 

Agency; Office of Federal Housing 

Enterprise Oversight, HUD. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: The Federal Housing Finance 

Agency (FHFA) is issuing an interim 

final rule with request for comments on 

Debt Collection. The interim final rule 

sets forth procedures for use by FHFA 

in collecting debts owed to the Federal 

Government. Agencies are required by 

law to issue a regulation on their debt 

collection procedures. The interim final 

rule includes procedures for collection 

of debts through salary offset, 

administrative offset, tax refund offset, 

and administrative wage garnishment. 

FHFA requests comments on the interim 

final rule. 

DATES: The interim final rule is effective 

on November 10, 2010. FHFA will 

accept written comments on the interim 

final rule on or before January 10, 2011. 

For additional information, see 

SUPPLEMENTARY INFORMATION. 

ADDRESSES: You may submit your 

comments on the interim final rule, 

identified by regulatory information 

number (RIN) 2590–AA15, by any one 

of the following methods: 

• E-mail: Comments to Alfred M. 

Pollard, General Counsel may be sent by 

e-mail at RegComments@fhfa.gov. 

Please include ‘‘RIN 2590–AA15’’ in the 

subject line of the message. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 

you submit your comment to the 

Federal eRulemaking Portal, please also 

send it by e-mail to FHFA at 

RegComments@fhfa.gov to ensure 

timely receipt by FHFA. Include the 

following information in the subject line 

of your submission: Comments/RIN 

2590–AA15. 

• U.S. Mail, United Parcel Service, 

Federal Express, or Other Mail Service: 

The mailing address for comments is: 

Alfred M. Pollard, General Counsel, 

Attention: Comments/RIN 2590–AA15, 

Federal Housing Finance Agency, 

Fourth Floor, 1700 G Street, NW., 

Washington, DC 20552. 

• Hand Delivered/Courier: The hand 

delivery address is: Alfred M. Pollard, 

General Counsel, Attention: Comments/ 

RIN 2590–AA15, Federal Housing 

Finance Agency, Fourth Floor, 1700 G 

Street, NW., Washington, DC 20552. The 

package should be logged at the Guard 

Desk, First Floor, on business days 

between 9 a.m. and 5 p.m. 

FOR FURTHER INFORMATION CONTACT: 

Andra Grossman, Senior Counsel, 

telephone (202) 343–1313 or Gail F. 

Baum, Associate General Counsel, 

telephone (202) 343–1508 (not toll-free 

numbers); Federal Housing Finance 

Agency, Fourth Floor, 1700 G Street, 

NW., Washington, DC 20552. The 

telephone number for the 

Telecommunications Device for the Deaf 

is (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Comments 

The Federal Housing Finance Agency 

(FHFA) invites comments on all aspects 

of the interim final rule, and will take 

all comments into consideration before 

issuing the final regulation. Copies of all 

comments will be posted without 

change, including any personal 

information you provide, such as your 


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1See Division A, titled the ‘‘Federal Housing 

Finance Regulatory Reform Act of 2008,’’ Title I, 

Section 1101 of HERA. 2See sections 1302 and 1312 of HERA. 3Public Law 89–508, 80 Stat. 308 (1966), as 

amended by the Debt Collection Act of 1982, Public 

Law 97–365, 96 Stat. 1749 (1982). 

4Public Law 104–134, 110 Stat. 1321 (1996). 

5 31 U.S.C. 3716. 

6 31 U.S.C. 3720A(b)(4); 26 CFR 301.6402–6(b); 31 

CFR 285.2(c). 

7 31 CFR chapter IX. 

8 5 U.S.C. 5514(a)(1). The procedures for salary 

offset are governed by 5 U.S.C. 5514 and by Office 

of Personnel Management (OPM) regulation at 

5 CFR part 550, subpart K. 

9 5 U.S.C. 5514(b)(1). 

10 5 CFR 550.1105(a)(1). 

11 31 U.S.C. 3716. 

12 31 U.S.C. 3720A, 26 CFR 301.6402–6. 

13 31 U.S.C. 3720A(b)(4); 26 CFR 301.6402–6(b). 

14 31 U.S.C. 3720D. 

name and address, on the FHFA Internet 

Web site at http://www.fhfa.gov. In 

addition, copies of all comments 

received will be available for 

examination by the public on business 

days between the hours of 10 a.m. and 

3 p.m., at the Federal Housing Finance 

Agency, Fourth Floor, 1700 G Street, 

NW., Washington, DC 20552. To make 

an appointment to inspect comments, 

please call the Office of General Counsel 

at (202) 414–6924. 

II. Background 

A. Establishment of the Federal Housing 

Finance Agency 

The Housing and Economic Recovery 

Act of 2008 (HERA), Public Law 

110–289, 122 Stat. 2654, amended the 

Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 

(12 U.S.C. 4501 et seq.) (Safety and 

Soundness Act) and the Federal Home 

Loan Bank Act (12 U.S.C. 1421 et seq.) 

to establish FHFA as an independent 

agency of the Federal Government.1

HERA transferred the supervisory and 

oversight responsibilities over the 

Federal National Mortgage Association 

(Fannie Mae), the Federal Home Loan 

Mortgage Corporation (Freddie Mac) 

(collectively, Enterprises), and the 

Federal Home Loan Banks (collectively, 

regulated entities), from the Office of 

Federal Housing Enterprise Oversight 

(OFHEO) and the Federal Housing 

Finance Board (FHFB), respectively, to 

FHFA. FHFA was established to oversee 

the prudential operations of the 

regulated entities to ensure that they 

operate in a safe and sound manner, 

including being adequately capitalized; 

and carry out their public policy 

missions, including fostering liquid, 

efficient, competitive and resilient 

national housing finance markets. The 

regulated entities continue to operate 

under regulations promulgated by 

OFHEO and FHFB and such regulations 

are enforceable by the Director of FHFA 

until such regulations are modified, 

terminated, set aside, or superseded by 

regulations issued by FHFA.2

The interim final rule, when 

published in its final form, would 

supersede OFHEO’s Debt Collection 

regulation at 12 CFR part 1704. 

B. Debt Collection 

The interim final rule implements the 

requirements of the Federal Claims 

Collection Act 3 and the Debt Collection 

Improvement Act of 1996 (DCIA).4 The 

DCIA requires agencies to either (1) 

adopt without change regulations on 

collecting debts by administrative offset 

promulgated by the Department of 

Justice or Department of the Treasury; or 

(2) prescribe agency regulations for 

collecting such debts by administrative 

offset, which are consistent with the 

Federal Claims Collection Standards 

(FCCS).5 The agency regulations are to 

protect the minimum due process rights 

that must be afforded to a debtor when 

an agency seeks to collect a debt, 

including the ability to verify, 

challenge, and compromise claims, and 

provide access to administrative appeals 

procedures which are both reasonable 

and protect the interests of the United 

States. FHFA has determined to issue its 

own agency regulations for debt 

collection, to account for FHFA’s status 

as an independent regulatory agency, 

and for ease of use. The interim final 

rule is consistent with the FCCS, as 

required by the DCIA. In addition, the 

tax refund offset provisions of the 

regulations satisfy the requirement of 

the Internal Revenue Service that FHFA 

adopt agency regulations authorizing its 

collection of debts by administrative 

offset in general and tax refund offset in 

particular.6 The administrative wage 

garnishment provisions of the 

regulations satisfy the requirement in 31 

CFR 285.11(f) that FHFA adopt 

regulations for the conduct of 

administrative wage garnishment 

hearings. 

1. Subpart A, General 

Subpart A addresses the collection of 

debts in general, and incorporates the 

debt collection procedures of the FCCS.7

Subpart A also provides, in accordance 

with applicable law and regulations, 

that FHFA will transfer debts that are 

delinquent for over 180 days to the 

Secretary of the Department of the 

Treasury for collection or other 

appropriate action. It further provides 

that debts that are delinquent for less 

than 180 days may be referred to debt 

collection centers for collection. 

2. Subpart B, Salary Offset 

Subpart B provides the procedures to 

collect debts owed to the Federal 

Government by FHFA employees and 

former FHFA employees who are 

employed by other agencies by salary 

offset, that is, by deductions from the 

current pay account of the employee.8

Agencies are required to promulgate 

their own salary offset regulations 9 that 

must conform with OPM regulation and 

be approved by OPM before becoming 

effective.10 The salary offset provisions 

of subpart B of the interim final rule, as 

well as corresponding definitions in 

subpart A, have been reviewed and 

approved by OPM. 

3. Subpart C, Administrative Offset 

Subpart C provides procedures that 

FHFA will use to collect debts by 

administrative offset, if salary offset is 

not applicable or appropriate. Under 

this method of collection, FHFA may 

collect a debt from a debtor by 

withholding money that is either 

payable to the debtor or held by the 

Federal Government for the debtor.11

Subpart C is consistent with the 

procedures of administrative offset set 

forth in 31 U.S.C. 3716 and the FCCS. 

4. Subpart D, Tax Refund Offset 

Subpart D sets forth the procedures 

used for collection by tax refund offset. 

If collection by salary offset or 

administrative offset is not feasible, 

FHFA may seek to recover monies owed 

it by requesting that the Internal 

Revenue Service reduce a tax refund to 

a debtor by the amount of the debt and 

pay such monies to the agency.12 In 

order to use the tax refund offset 

method of collection, the Internal 

Revenue Service requires an agency to 

promulgate temporary or permanent 

regulations covering all three collection 

methods: salary offset, administrative 

offset, and tax refund offset.13 The 

publication of FHFA’s debt collection 

regulation would satisfy that 

requirement. 

5. Subpart E, Administrative Wage 

Garnishment 

Subpart E sets forth administrative 

wage garnishment procedures, 

authorized by the DCIA.14 DCIA permits 

agencies to collect debts by ordering a 

non-Federal employer to deduct 

amounts up to 15 percent of an 

employee’s disposable pay (or a greater 

amount to which the employee 

consents). Treasury regulations require 

agencies to adopt regulations for the 

conduct of administrative wage 


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15 31 CFR 285.11. 

16 5 U.S.C. 553(b) and (c). 

17 44 U.S.C. 3501 et seq. 

18 5 U.S.C. 601 et seq. 

19 5 U.S.C. 605(b). 20 Id. 

garnishment hearings.15 The provisions 

of FHFA’s interim final rule are 

consistent with DCIA and Treasury 

regulations, essentially tracking 

Treasury’s regulation. 

C. Effective Date and Request for 

Comments 

FHFA has determined that this 

interim final rule pertains to agency 

practice and procedure and is 

interpretative in nature. The procedures 

contained in the interim final rule for 

salary offset, administrative offset, tax 

refund offset, and administrative wage 

garnishment are mandated by law and 

by regulations promulgated by OPM, 

jointly by the Department of the 

Treasury and the Department of Justice, 

and by the IRS. Therefore, the interim 

final rule is not subject to the 

Administrative Procedure Act (APA) 

and the requirements of the APA for a 

notice and comment period and for a 

delayed effective date.16 Nevertheless, 

FHFA requests comments from the 

public and will take all comments into 

consideration before promulgating the 

final rule. Copies of all comments 

received will be posted on the agency 

Web site and made available for 

examination by the public as indicated 

in the COMMENTS section above. 

Regulatory Impact 

Paperwork Reduction Act 

The interim final rule does not 

contain any information collection 

requirement that requires the approval 

of OMB under the Paperwork Reduction 

Act.17

Regulatory Flexibility Act 

The Regulatory Flexibility Act 18

requires that a regulation that has a 

significant economic impact on a 

substantial number of small entities, 

small businesses, or small organizations 

must include an initial regulatory 

flexibility analysis describing the 

regulation’s impact on small entities. 

Such an analysis need not be 

undertaken if the agency has certified 

that the regulation will not have a 

significant economic impact on a 

substantial number of small entities.19

FHFA has considered the impact of the 

interim final rule under the Regulatory 

Flexibility Act. FHFA certifies that the 

interim final rule is not likely to have 

a significant economic impact on a 

substantial number of small business 

entities because the regulation applies 

primarily to Federal employees and a 

limited number of Federal and business 

entities.20

List of Subjects 

12 CFR Part 1208 

Administrative practice and 

procedure, Claims, Debt collection, 

Government employees, Wages. 

12 CFR Part 1704 

Administrative practice and 

procedure, Debt collection. 

Authority and Issuance 

■ Accordingly, for the reasons stated in 

the preamble, under the authority of 12 

U.S.C. 4526, FHFA is amending 

Chapters XII and XVII of Title 12 of the 

Code of Federal Regulations as follows: 

CHAPTER XII—FEDERAL HOUSING 

FINANCE AGENCY 

SUBCHAPTER A—ORGANIZATION AND 

OPERATIONS 

■ 1. Add part 1208 to Subchapter A to 

read as follows: 

PART 1208—DEBT COLLECTION 

Subpart A—General 

Sec. 

1208.1 Authority and scope. 

1208.2 Definitions. 

1208.3 Referrals to the Department of the 

Treasury, collection services, and use of 

credit bureaus. 

1208.4 Reporting delinquent debts to credit 

bureaus. 

1208.5 to 1208.19 [Reserved] 

Subpart B—Salary Offset 

1208.20 Authority and scope. 

1208.21 Notice requirements before salary 

offset where FHFA is the creditor 

agency. 

1208.22 Review of FHFA records related to 

the debt. 

1208.23 Opportunity for a hearing where 

FHFA is the creditor agency. 

1208.24 Certification where FHFA is the 

creditor agency. 

1208.25 Voluntary repayment agreements 

as alternative to salary offset where 

FHFA is the creditor agency. 

1208.26 Special review where FHFA is the 

creditor agency. 

1208.27 Notice of salary offset where FHFA 

is the paying agency. 

1208.28 Procedures for salary offset where 

FHFA is the paying agency. 

1208.29 Coordinating salary offset with 

other agencies. 

1208.30 Interest, penalties, and 

administrative costs. 

1208.31 Refunds. 

1208.32 Request from a creditor agency for 

the services of a hearing official. 

1208.33 Non-waiver of rights by payments. 

Subpart C—Administrative Offset 

1208.40 Authority and scope. 

1208.41 Collection. 

1208.42 Administrative offset prior to 

completion of procedures. 

1208.43 Procedures. 

1208.44 Interest, penalties, and 

administrative costs. 

1208.45 Refunds. 

1208.46 No requirement for duplicate 

notice. 

1208.47 Requests for administrative offset 

to other Federal agencies. 

1208.48 Requests for administrative offset 

from other Federal agencies. 

1208.49 Administrative offset against 

amounts payable from Civil Service 

Retirement and Disability Fund. 

Subpart D—Tax Refund Offset 

1208.50 Authority and scope. 

1208.51 Definitions. 

1208.52 Procedures. 

1208.53 No requirement for duplicate 

notice. 

1208.54 to 1208.59 [Reserved] 

Subpart E—Administrative Wage 

Garnishment 

1208.60 Scope and purpose. 

1208.61 Notice. 

1208.62 Debtor’s rights. 

1208.63 Form of hearing. 

1208.64 Effect of timely request. 

1208.65 Failure to timely request a hearing. 

1208.66 Hearing official. 

1208.67 Procedure. 

1208.68 Format of hearing. 

1208.69 Date of decision. 

1208.70 Content of decision. 

1208.71 Finality of agency action. 

1208.72 Failure to appear. 

1208.73 Wage garnishment order. 

1208.74 Certification by employer. 

1208.75 Amounts withheld. 

1208.76 Exclusions from garnishment. 

1208.77 Financial hardship. 

1208.78 Ending garnishment. 

1208.79 Prohibited actions by employer. 

1208.80 Refunds. 

1208.81 Right of action. 

Authority: 5 U.S.C. 5514; 12 U.S.C. 4526; 

26 U.S.C. 6402(d); 31 U.S.C. 3701–3720D; 31 

CFR 285.2; 31 CFR Chapter IX. 

Subpart A—General 

§ 1208.1 Authority and scope. 

(a) Authority. FHFA issues this part 

1208 under the authority of 5 U.S.C. 

5514 and 31 U.S.C. 3701–3720D, and in 

conformity with the Federal Claims 

Collection Standards (FCCS) at 31 CFR 

chapter IX; the regulations on salary 

offset issued by the Office of Personnel 

Management (OPM) at 5 CFR part 550, 

subpart K; the regulations on tax refund 

offset issued by the United States 

Department of the Treasury (Treasury) 

at 31 CFR 285.2; and the regulations on 

administrative wage garnishment issued 

by Treasury at 31 CFR 285.11. 

(b) Scope.—(1) This part applies to 

debts that are owed to the Federal 

Government by Federal employees; 

other persons, organizations, or entities 


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that are indebted to FHFA; and by 

Federal employees of FHFA who are 

indebted to other agencies, except for 

those debts listed in paragraph (b)(2) of 

this section. 

(2) Subparts B and C of this part 1208 

do not apply to— 

(i) Debts or claims arising under the 

Internal Revenue Code (26 U.S.C. 1 et 

seq.), the Social Security Act (42 U.S.C. 

301 et seq.) or the tariff laws of the 

United States; 

(ii) Any case to which the Contract 

Disputes Act (41 U.S.C. 601 et seq.) 

applies; 

(iii) Any case where collection of a 

debt is explicitly provided for or 

provided by another statute, e.g. travel 

advances under 5 U.S.C. 5705 and 

employee training expenses under 

5 U.S.C. 4108, or, as provided for by 

title 11 of the United States Code, when 

the claims involve bankruptcy; 

(iv) Any debt based in whole or in 

part on conduct in violation of the 

antitrust laws or involving fraud, the 

presentation of a false claim, or 

misrepresentation on the part of the 

debtor or any party having an interest in 

the claim, unless the Department of 

Justice authorizes FHFA to handle the 

collection; or 

(v) Claims between agencies. 

(3) Nothing in this part precludes the 

compromise, suspension, or termination 

of collection actions, where appropriate, 

under standards implementing the Debt 

Collection Improvement Act (DCIA) (31 

U.S.C. 3701 et seq.), the FCCS (31 CFR 

chapter IX) or the use of alternative 

dispute resolution methods if they are 

not inconsistent with applicable law 

and regulations. 

(4) Nothing in this part precludes an 

employee from requesting waiver of an 

erroneous payment under 5 U.S.C. 5584, 

10 U.S.C. 2774, or 32 U.S.C. 716, or 

from questioning the amount or validity 

of a debt, in the manner set forth in this 

part. 

§ 1208.2 Definitions. 

The following terms apply to this 

part, unless defined otherwise 

elsewhere– 

Administrative offset means an action, 

pursuant to 31 U.S.C. 3716, in which 

the Federal Government withholds 

funds payable to, or held by the Federal 

Government for a person, organization, 

or other entity in order to collect a debt 

from that person, organization, or other 

entity. Such funds include funds 

payable by the Federal Government on 

behalf of a State Government. 

Agency means an executive 

department or agency; a military 

department; the United States Postal 

Service; the Postal Regulatory 

Commission; any nonappropriated fund 

instrumentality described in 5 U.S.C. 

2105(c); the United States Senate; the 

United States House of Representatives; 

any court, court administrative office, or 

instrumentality in the judicial or 

legislative branches of the Government; 

or a Government corporation. If an 

agency under this definition is a 

component of an agency, the broader 

definition of agency may be used in 

applying the provisions of 5 U.S.C. 

5514(b) (concerning the authority to 

prescribe regulations). 

Centralized administrative offset 

means the mandatory referral to the 

Secretary of the Treasury by a creditor 

agency of a past due debt which is more 

than 180 days delinquent, for the 

purpose of collection under the 

Treasury’s centralized offset program. 

Certification means a written 

statement received by a paying agency 

from a creditor agency that requests the 

paying agency to institute salary offset 

of an employee, to the Financial 

Management Service (FMS) for offset or 

to the Secretary of the Treasury for 

centralized administrative offset, and 

specifies that required procedural 

protections have been afforded the 

debtor. Where the debtor requests a 

hearing on a claimed debt, the decision 

by a hearing official or administrative 

law judge constitutes a certification. 

Claim or debt (used interchangeably 

in this part) means any amount of funds 

or property that has been determined by 

an agency official to be due the Federal 

Government by a person, organization, 

or entity, except another agency. It also 

means any amount of money, funds, or 

property owed by a person to a State, 

the District of Columbia, American 

Samoa, Guam, the United States Virgin 

Islands, the Commonwealth of the 

Northern Mariana Islands, or the 

Commonwealth of Puerto Rico. For 

purposes of this part, a debt owed to 

FHFA constitutes a debt owed to the 

Federal Government. A claim or debt 

includes: 

(1) Funds owed on account of loans 

made, insured, or guaranteed by the 

Federal Government, including any 

deficiency or any difference between the 

price obtained by the Federal 

Government in the sale of a property 

and the amount owed to the Federal 

Government on a mortgage on the 

property; 

(2) Unauthorized expenditures of 

agency funds; 

(3) Overpayments, including 

payments disallowed by audits 

performed by the Inspector General of 

the agency administering the program; 

(4) Any amount the Federal 

Government is authorized by statute to 

collect for the benefit of any person; 

(5) The unpaid share of any nonFederal partner in a program involving 

a Federal payment, and a matching or 

cost-sharing payment by the nonFederal partner; 

(6) Any fine or penalty assessed by an 

agency; and 

(7) Other amounts of money or 

property owed to the Federal 

Government. 

Compromise means the settlement or 

forgiveness of a debt under 31 U.S.C. 

3711, in accordance with standards set 

forth in the FCCS and applicable 

Federal law. 

Creditor agency means the agency to 

which the debt is owed, including a 

debt collection center when acting on 

behalf of a creditor agency in matters 

pertaining to the collection of a debt. 

Debt See the definition of the terms 

‘‘Claim or debt’’ of this section. 

Debt collection center means the 

Department of the Treasury or any other 

agency or division designated by the 

Secretary of the Treasury with authority 

to collect debts on behalf of creditor 

agencies in accordance with 31 U.S.C. 

3711(g). 

Debtor means the person, 

organization, or entity owing money to 

the Federal Government. 

Delinquent debt means a debt that has 

not been paid by the date specified in 

the agency’s initial written demand for 

payment or applicable agreement or 

instrument (including a postdelinquency payment agreement) unless 

other satisfactory payment arrangements 

have been made. 

Director means the Director of FHFA 

or Director’s designee. 

Disposable pay means that part of 

current basic pay, special pay, incentive 

pay, retired pay, or retainer pay (or in 

the case of an employee not entitled to 

basic pay, other authorized pay) 

remaining after the deduction of any 

amount required by law to be withheld 

(other than deductions to execute 

garnishment orders in accordance with 

5 CFR parts 581 and 582). FHFA will 

apply the order of precedence contained 

in OPM guidance (PPM–2008–01; Order 

Of Precedence When Gross Pay Is Not 

Sufficient To Permit All Deductions), as 

follows— 

(1) Retirement deductions for defined 

benefit plan (including Civil Service 

Retirement System, Federal Employees 

Retirement System, or other similar 

defined benefit plan); 

(2) Social security (OASDI) tax; 

(3) Medicare tax; 

(4) Federal income tax; 

(5) Basic health insurance premium 

(including Federal Employees Health 


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Benefits premium, pre-tax or post-tax, or 

premium for similar benefit under 

another authority but not including 

amounts deducted for supplementary 

coverage); 

(6) Basic life insurance premium 

(including Federal Employees’ Group 

Life Insurance—FEGLI—Basic premium 

or premium for similar benefit under 

another authority); 

(7) State income tax; 

(8) Local income tax; 

(9) Collection of debts owed to the 

U.S. Government (e.g., tax debt, salary 

overpayment, failure to withhold proper 

amount of deductions, advance of salary 

or travel expenses, etc.; debts which 

may or may not be delinquent; debts 

which may be collected through the 

Treasury’s Financial Management 

Services Treasury Offset Program, an 

automated centralized debt collection 

program for collecting Federal debt from 

Federal payments): 

(i) Continuous levy under the Federal 

Payment Levy Program (tax debt); and 

(ii) Salary offsets (whether 

involuntary under 5 U.S.C. 5514 or 

similar authority or required by a 

voluntarily signed written agreement; if 

multiple debts are subject to salary 

offset, the order is based on when each 

offset commenced—with earliest 

commencing offset at the top of the 

order—unless there are special 

circumstances, as determined by the 

paying agency). 

(10) Court-Ordered collection/debt: 

(i) Child support (may include 

attorney and other fees as provided for 

in 5 CFR 581.102(d)). If there are 

multiple child support orders, the 

priority of orders is governed by 42 

U.S.C. 666(b) and implementing 

regulations, as required by 42 U.S.C. 

659(d)(2); 

(ii) Alimony (may include attorney 

and other fees as provided for in 5 CFR 

581.102(d)). If there are multiple 

alimony orders, they are prioritized on 

a first-come, first-served basis, as 

required by 42 U.S.C. 659(d)(3); 

(iii) Bankruptcy; and 

(iv) Commercial garnishments. 

(11) Optional benefits: 

(i) Health care/limited-expense health 

care flexible spending accounts (pre-tax 

benefit under FedFlex or equivalent 

cafeteria plan); 

(ii) Dental (pre-tax benefit under 

FedFlex or equivalent cafeteria plan); 

(iii) Vision (pre-tax benefit under 

FedFlex or equivalent cafeteria plan); 

(iv) Health Savings Account (pre-tax 

benefit under FedFlex or equivalent 

cafeteria plan); 

(v) Optional life insurance premiums 

(FEGLI optional benefits or similar 

benefits under other authority); 

(vi) Long-term care insurance 

premiums; 

(vii) Dependent-care flexible spending 

accounts (pre-tax benefit under FedFlex 

or equivalent cafeteria plan); 

(viii) Thrift Savings Plan (TSP): 

(A) Loan payments; 

(B) Basic contributions; and 

(C) Catch-up contributions; and 

(ix) Other optional benefits. 

(12) Other voluntary deductions/ 

allotments: 

(i) Military service deposits; 

(ii) Professional associations; 

(iii) Union dues; 

(iv) Charities; 

(v) Bonds; 

(vi) Personal account allotments (e.g., 

to savings or checking account); and 

(vii) Additional voluntary deductions 

(on first-come, first-served basis); and 

(13) IRS paper levies. 

Employee means a current employee 

of FHFA or other agency, including a 

current member of the Armed Forces or 

a Reserve of the Armed Forces of the 

United States. 

Federal Claims Collection Standards 

(FCCS) means standards published at 31 

CFR chapter IX. 

FHFA means the Federal Housing 

Finance Agency. 

Garnishment means the process of 

withholding amounts from the 

disposable pay of a person employed 

outside the Federal Government, and 

the paying of those amounts to a 

creditor in satisfaction of a withholding 

order. 

Hearing official means an individual 

who is responsible for conducting any 

hearing with respect to the existence or 

amount of a debt claimed and for 

rendering a final decision on the basis 

of such hearing. A hearing official may 

not be under the supervision or control 

of the Director of FHFA when FHFA is 

the creditor agency but may be an 

administrative law judge. 

Notice of intent means a written 

notice of a creditor agency to a debtor 

that states that the debtor owes a debt 

to the creditor agency and apprises the 

debtor of the applicable procedural 

rights. 

Notice of salary offset means a written 

notice from the paying agency to an 

employee after a certification has been 

issued by a creditor agency that informs 

the employee that salary offset will 

begin at the next officially established 

pay interval. 

Paying agency means an agency of the 

Federal Government that employs the 

individual who owes a debt to an 

agency of the Federal Government and 

transmits payment requests in the form 

of certified payment vouchers, or other 

similar forms, to a disbursing official for 

disbursement. The same agency may be 

both the creditor agency and the paying 

agency. 

Salary offset means an administrative 

offset to collect a debt under 5 U.S.C. 

5514 by deductions at one or more 

officially established pay intervals from 

the current pay account of an employee 

without his or her consent. 

Waiver means the cancellation, 

remission, forgiveness, or non-recovery 

of a debt allegedly owed by an employee 

to FHFA or another agency as permitted 

or required by 5 U.S.C. 5584 or 8346(b), 

10 U.S.C. 2774, 32 U.S.C. 716, or any 

other law. 

Withholding order means any order 

for withholding or garnishment of pay 

issued by an agency, or judicial, or 

administrative body. For purposes of 

administrative wage garnishment, the 

terms ‘‘wage garnishment order’’ and 

‘‘garnishment order’’ have the same 

meaning as ‘‘withholding order.’’ 

§ 1208.3 Referrals to the Department of the 

Treasury, collection services, and use of 

credit bureaus. 

(a) Referral of delinquent debts.—(1) 

FHFA shall transfer to the Secretary of 

the Department of the Treasury any past 

due, legally enforceable nontax debt that 

has been delinquent for a period of 180 

days or more so that the Secretary may 

take appropriate action to collect the 

debt or terminate collection action in 

accordance with 31 U.S.C. 3716, 5 

U.S.C. 5514, 5 CFR 550.1108, 31 CFR 

part 285, and the FCCS. 

(2) FHFA may transfer any past due, 

legally enforceable nontax debt that has 

been delinquent for less than a period 

of 180 days to a debt collection center 

for collection in accordance with 31 

U.S.C. 3716, 5 U.S.C. 5514, 5 CFR 

550.1108, 31 CFR part 285, and the 

FCCS. 

(b) Collection Services. Section 13 of 

the Debt Collection Act (31 U.S.C. 3718) 

authorizes agencies to enter into 

contracts for collection services to 

recover debts owed the Federal 

Government. The Debt Collection Act 

requires that certain provisions be 

contained in such contracts, including: 

(1) The agency retains the authority to 

resolve a dispute, including the 

authority to terminate a collection 

action or refer the matter to the Attorney 

General for civil remedies; and 

(2) The contractor is subject to the 

Privacy Act of 1974, as it applies to 

private contractors, as well as subject to 

State and Federal laws governing debt 

collection practices. 

(c) Referrals to collection agencies.— 

(1) FHFA has authority to contract for 

collection services to recover delinquent 


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debts in accordance with 31 U.S.C. 

3718(a) and the FCCS (31 CFR 901.5). 

(2) FHFA may use private collection 

agencies where it determines that their 

use is in the best interest of the Federal 

Government. Where FHFA determines 

that there is a need to contract for 

collection services, the contract will 

provide that: 

(i) The authority to resolve disputes, 

compromise claims, suspend or 

terminate collection action, or refer the 

matter to the Department of Justice for 

litigation or to take any other action 

under this part will be retained by 

FHFA; 

(ii) Contractors are subject to the 

Privacy Act of 1974, as amended, to the 

extent specified in 5 U.S.C. 552a(m) and 

to applicable Federal and State laws and 

regulations pertaining to debt collection 

practices, such as the Fair Debt 

Collection Practices Act, 15 U.S.C. 1692; 

(iii) The contractor is required to 

strictly account for all amounts 

collected; 

(iv) The contractor must agree that 

uncollectible accounts shall be returned 

with appropriate documentation to 

enable FHFA to determine whether to 

pursue collection through litigation or 

to terminate collection; and 

(v) The contractor must agree to 

provide any data in its files requested by 

FHFA upon returning the account to 

FHFA for subsequent referral to the 

Department of Justice for litigation. 

§ 1208.4 Reporting delinquent debts to 

credit bureaus. 

(a) FHFA may report delinquent debts 

to consumer reporting agencies (31 

U.S.C. 3701(a)(3), 3711). Sixty calendar 

days prior to release of information to a 

consumer reporting agency, the debtor 

shall be notified, in writing, of the 

intent to disclose the existence of the 

debt to a consumer reporting agency. 

Such notice of intent may be a separate 

correspondence or included in 

correspondence demanding direct 

payment. The notice shall be in 

conformance with 31 U.S.C. 3711(e) and 

the FCCS. In the notice, FHFA shall 

provide the debtor with: 

(1) An opportunity to inspect and 

copy agency records pertaining to the 

debt; 

(2) An opportunity for an 

administrative review of the legal 

enforceability or past due status of the 

debt; 

(3) An opportunity to enter into a 

repayment agreement on terms 

satisfactory to FHFA to prevent FHFA 

from reporting the debt as overdue to 

consumer reporting agencies, and 

provide deadlines and method for 

requesting this relief; 

(4) An explanation of the rate of 

interest that will accrue on the debt, that 

all costs incurred to collect the debt will 

be charged to the debtor, the authority 

for assessing these costs, and the 

manner in which FHFA will calculate 

the amount of these costs; 

(5) An explanation that FHFA will 

report the debt to the consumer 

reporting agencies to the detriment of 

the debtor’s credit rating; and 

(6) A description of the collection 

actions that the agency may take in the 

future if those presently proposed 

actions do not result in repayment of the 

debt, including the filing of a lawsuit 

against the borrower by the agency and 

assignment of the debt for collection by 

offset against Federal income tax 

refunds or the filing of a lawsuit against 

the debtor by the Federal Government. 

(b) The information that may be 

disclosed to the consumer reporting 

agency is limited to: 

(1) The debtor’s name, address, social 

security number or taxpayer 

identification number, and any other 

information necessary to establish the 

identity of the individual; 

(2) The amount, status, and history of 

the claim; and 

(3) FHFA program or activity under 

which the claim arose. 

(c) Subsequent reports. FHFA may 

update its report to the credit bureau 

whenever it has knowledge of events 

that substantially change the status of 

the amount of liability. 

(d) Subsequent reports of delinquent 

debts. Pursuant to 31 CFR 901.4, FHFA 

will report delinquent debt to the 

Department of Housing and Urban 

Development’s Credit Alert Interactive 

Voice Response System (CAIVRS). 

(e) Privacy Act considerations. A 

delinquent debt may not be reported 

under this section unless a notice issued 

pursuant to the Privacy Act, 5 U.S.C. 

552a(e)(4), authorizes the disclosure of 

information about the debtor to a credit 

bureau or CAIVRS. 

§§ 1208.5 to 1208.19 [Reserved] 

Subpart B—Salary Offset 

§ 1208.20 Authority and scope. 

(a) Authority. FHFA may collect debts 

owed by employees to the Federal 

Government by means of salary offset 

under the authority of 5 U.S.C. 5514; 5 

CFR part 550, subpart K; and this 

subpart B. 

(b) Scope.—(1) The procedures set 

forth in this subpart B apply to 

situations where FHFA is attempting to 

collect a debt by salary offset that is 

owed to it by an individual employed 

by FHFA or by another agency; or where 

FHFA employs an individual who owes 

a debt to another agency. 

(2) The procedures set forth in this 

subpart B do not apply to: 

(i) Any routine intra-agency 

adjustment of pay that is attributable to 

clerical or administrative error or delay 

in processing pay documents that have 

occurred within the four pay periods 

preceding the adjustment, or any 

adjustment to collect a debt amounting 

to $50 or less. However, at the time of 

any such adjustment, or as soon 

thereafter as possible, FHFA or its 

designated payroll agent shall provide 

the employee with a written notice of 

the nature and the amount of the 

adjustment and a point of contact for 

contesting such adjustment. 

(ii) Any negative adjustment to pay 

that arises from an employee’s election 

of coverage or a change in coverage 

under a Federal benefits program that 

requires periodic deductions from pay, 

if the amount to be recovered was 

accumulated over four pay periods or 

less. However, at the time such 

adjustment is made, FHFA or its payroll 

agent shall provide in the employee’s 

earnings statement a clear and concise 

statement that informs the employee of 

the previous overpayment. 

§ 1208.21 Notice requirements before 

salary offset where FHFA is the creditor 

agency. 

(a) Notice of Intent. Deductions from 

an employee’s salary may not be made 

unless FHFA provides the employee 

with a Notice of Intent at least 30 

calendar days before the salary offset is 

initiated. 

(b) Contents of Notice of Intent. The 

Notice of Intent shall advise the 

employee of the following: 

(1) That FHFA has reviewed the 

records relating to the claim and has 

determined that the employee owes the 

debt; 

(2) That FHFA intends to collect the 

debt by deductions from the employee’s 

current disposable pay account; 

(3) The amount of the debt and the 

facts giving rise to the debt; 

(4) The frequency and amount of the 

intended deduction (stated as a fixed 

dollar amount or as a percentage of pay 

not to exceed 15 percent of disposable 

pay), and the intention to continue the 

deductions until the debt and all 

accumulated interest are paid in full or 

otherwise resolved; 

(5) The name, address, and telephone 

number of the person to whom the 

employee may propose a written 

alternative schedule for voluntary 

repayment, in lieu of salary offset. The 

employee shall include a justification 

for the alternative schedule in his or her 


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proposal. If the terms of the alternative 

schedule are agreed upon by the 

employee and FHFA, the alternative 

written schedule shall be signed by both 

the employee and FHFA; 

(6) An explanation of FHFA’s policy 

concerning interest, penalties, and 

administrative costs, the date by which 

payment should be made to avoid such 

costs, and a statement that such 

assessments must be made unless 

excused in accordance with the FCCS; 

(7) The employee’s right to inspect 

and copy all records of FHFA pertaining 

to his or her debt that are not exempt 

from disclosure or to receive copies of 

such records if he or she is unable 

personally to inspect the records as the 

result of geographical or other 

constraints; 

(8) The name, address, and telephone 

number of the FHFA employee to whom 

requests for access to records relating to 

the debt must be sent; 

(9) The employee’s right to a hearing 

conducted by an impartial hearing 

official with respect to the existence and 

amount of the debt claimed or the 

repayment schedule i.e., the percentage 

of disposable pay to be deducted each 

pay period, so long as a request is filed 

by the employee as prescribed in 

§ 1208.23; the name and address of the 

office to which the request for a hearing 

should be sent; and the name, address, 

and telephone number of a person 

whom the employee may contact 

concerning procedures for requesting a 

hearing; 

(10) The filing of a request for a 

hearing on or before the 30th calendar 

day following receipt of the Notice of 

Intent will stay the commencement of 

collection proceedings and a final 

decision on whether a hearing will be 

held (if a hearing is requested) or will 

be issued at the earliest practical date, 

but not later than 60 calendar days after 

the request for the hearing; 

(11) FHFA shall initiate certification 

procedures to implement a salary offset 

unless the employee files a request for 

a hearing on or before the 30th calendar 

day following receipt of the Notice of 

Intent; 

(12) Any knowingly false or frivolous 

statement, representations, or evidence 

may subject the employee to: 

(i) Disciplinary procedures 

appropriate under 5 U.S.C. chapter 75, 

5 CFR part 752, or any other applicable 

statutes or regulations; 

(ii) Penalties under the False Claims 

Act, 31 U.S.C. 3729 through 3731, or 

under any other applicable statutory 

authority; or 

(iii) Criminal penalties under 18 

U.S.C. 286, 287, 1001, and 1002, or 

under any other applicable statutory 

authority; 

(13) That the employee also has the 

right to request waiver of overpayment 

pursuant to 5 U.S.C. 5584 and may 

exercise any other rights and remedies 

available to the employee under statutes 

or regulations governing the program for 

which the collection is being made; 

(14) Unless there are applicable 

contractual or statutory provisions to 

the contrary, amounts paid on or 

deducted from debts that are later 

waived or found not to be owed to the 

Federal Government shall be promptly 

refunded to the employee; and 

(15) Proceedings with respect to the 

debt are governed by 5 U.S.C. 5514. 

§ 1208.22 Review of FHFA records related 

to the debt. 

(a) Request for review. An employee 

who desires to inspect or copy FHFA 

records related to a debt owed by the 

employee to FHFA must send a letter to 

the individual designated in the Notice 

of Intent requesting access to the 

relevant records. The letter must be 

received in the office of that individual 

within 15 calendar days after the 

employee’s receipt of the Notice of 

Intent. 

(b) Review location and time. In 

response to a timely request submitted 

by the employee, the employee shall be 

notified of the location and time when 

the employee may inspect and copy 

records related to his or her debt that are 

not exempt from disclosure. If the 

employee is unable personally to 

inspect such records as the result of 

geographical or other constraints, FHFA 

shall arrange to send copies of such 

records to the employee. The debtor 

shall pay copying costs unless they are 

waived by FHFA. Copying costs shall be 

assessed pursuant to FHFA’s Freedom 

of Information Act Regulation, 12 CFR 

part 1202. 

§ 1208.23 Opportunity for a hearing where 

FHFA is the creditor agency. 

(a) Request for a hearing.—(1) Timeperiod for submission. An employee 

who requests a hearing on the existence 

or amount of the debt held by FHFA or 

on the salary-offset schedule proposed 

by FHFA, must send a written request 

to FHFA. The request for a hearing must 

be received by FHFA on or before the 

30th calendar day following receipt by 

the employee of the Notice of Intent. 

(2) Failure to submit timely. If the 

employee files a request for a hearing 

after the expiration of the 30th calendar 

day, the employee shall not be entitled 

to a hearing. However, FHFA may 

accept the request if the employee can 

show that the delay was the result of 

circumstances beyond his or her control 

or that he or she failed to receive actual 

notice of the filing deadline. 

(3) Contents of request. The request 

for a hearing must be signed by the 

employee and must fully identify and 

explain with reasonable specificity all 

the facts, evidence, and witnesses, if 

any, that the employee believes support 

his or her position. The employee must 

also specify whether he or she requests 

an oral hearing. If an oral hearing is 

requested, the employee should explain 

why a hearing by examination of the 

documents without an oral hearing 

would not resolve the matter. 

(4) Failure to request a hearing. The 

failure of an employee to request a 

hearing will be considered an admission 

by the employee that the debt exists in 

the amount specified in the Notice of 

Intent that was provided to the 

employee under § 1208.21(b). 

(b) Obtaining the services of a hearing 

official.—(1) Debtor is not an FHFA 

employee. When the debtor is not an 

FHFA employee and FHFA cannot 

provide a prompt and appropriate 

hearing before an administrative law 

judge or other hearing official, FHFA 

may request a hearing official from an 

agent of the paying agency, as 

designated in 5 CFR part 581, appendix 

A, or as otherwise designated by the 

paying agency. The paying agency must 

cooperate with FHFA to provide a 

hearing official, as required by the 

FCCS. 

(2) Debtor is an FHFA employee. 

When the debtor is an FHFA employee, 

FHFA may contact any agent of another 

agency, as designated in 5 CFR part 581, 

appendix A, or as otherwise designated 

by the agency, to request a hearing 

official. 

(c) Procedure.—(1) Notice of hearing. 

After the employee requests a hearing, 

the hearing official shall notify the 

employee of the form of the hearing to 

be provided. If the hearing will be oral, 

the notice shall set forth the date, time, 

and location of the hearing, which must 

occur no more than 30 calendar days 

after the request is received, unless the 

employee requests that the hearing be 

delayed. If the hearing will be 

conducted by an examination of 

documents, the employee shall be 

notified within 30 calendar days that he 

or she should submit evidence and 

arguments in writing to the hearing 

official within 30 calendar days. 

(2) Oral hearing.—(i) An employee 

who requests an oral hearing shall be 

provided an oral hearing if the hearing 

official determines that the matter 

cannot be resolved by an examination of 

the documents alone, as for example, 

when an issue of credibility or veracity 


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is involved. The oral hearing need not 

be an adversarial adjudication; and rules 

of evidence need not apply. Witnesses 

who testify in an oral hearing shall do 

so under oath or affirmation. 

(ii) Oral hearings may take the form 

of, but are not limited to: 

(A) Informal conferences with the 

hearing official in which the employee 

and agency representative are given full 

opportunity to present evidence, 

witnesses, and argument; 

(B) Informal meetings in which the 

hearing examiner interviews the 

employee; or 

(C) Formal written submissions 

followed by an opportunity for oral 

presentation. 

(3) Hearing by examination of 

documents. If the hearing official 

determines that an oral hearing is not 

necessary, he or she shall make the 

determination based upon an 

examination of the documents. 

(d) Record. The hearing official shall 

maintain a summary record of any 

hearing conducted under this section. 

(e) Decision.—(1) The hearing official 

shall issue a written opinion stating his 

or her decision, based upon all evidence 

and information developed during the 

hearing, as soon as practicable after the 

hearing, but not later than 60 calendar 

days after the date on which the request 

was received by FHFA, unless the 

hearing was delayed at the request of 

the employee, in which case the 60-day 

decision period shall be extended by the 

number of days by which the hearing 

was postponed. 

(2) The decision of the hearing official 

shall be final and is considered to be an 

official certification regarding the 

existence and the amount of the debt for 

purposes of executing salary offset 

under 5 U.S.C. 5514. If the hearing 

official determines that a debt may not 

be collected by salary offset, but FHFA 

finds that the debt is still valid, FHFA 

may seek collection of the debt through 

other means in accordance with 

applicable law and regulations. 

(f) Content of decision. The written 

decision shall include: 

(1) A summary of the facts concerning 

the origin, nature, and amount of the 

debt; 

(2) The hearing official’s findings, 

analysis, and conclusions; and 

(3) The terms of any repayment 

schedules, if applicable. 

(g) Failure to appear. If, in the 

absence of good cause shown, such as 

illness, the employee or the 

representative of FHFA fails to appear, 

the hearing official shall proceed with 

the hearing as scheduled, and make his 

or her decision based upon the oral 

testimony presented and the 

documentation submitted by both 

parties. At the request of both parties, 

the hearing official may schedule a new 

hearing date. Both parties shall be given 

reasonable notice of the time and place 

of the new hearing. 

§ 1208.24 Certification where FHFA is the 

creditor agency. 

(a) Issuance. FHFA shall issue a 

certification in all cases where the 

hearing official determines that a debt 

exists or the employee admits the 

existence and amount of the debt, as for 

example, by failing to request a hearing. 

(b) Contents. The certification must be 

in writing and state: 

(1) That the employee owes the debt; 

(2) The amount and basis of the debt; 

(3) The date the Federal Government’s 

right to collect the debt first accrued; 

(4) The date the employee was 

notified of the debt, the action(s) taken 

pursuant to FHFA’s regulations, and the 

dates such actions were taken; 

(5) If the collection is to be made by 

lump-sum payment, the amount and 

date such payment will be collected; 

(6) If the collection is to be made in 

installments through salary offset, the 

amount or percentage of disposable pay 

to be collected in each installment and, 

if FHFA wishes, the desired 

commencing date of the first 

installment, if a date other than the next 

officially established pay period; and 

(7) A statement that FHFA’s 

regulation on salary offset has been 

approved by OPM pursuant to 5 CFR 

part 550, subpart K. 

§ 1208.25 Voluntary repayment 

agreements as alternative to salary offset 

where FHFA is the creditor agency. 

(a) Proposed repayment schedule. In 

response to a Notice of Intent, an 

employee may propose to repay the debt 

voluntarily in lieu of salary offset by 

submitting a written proposed 

repayment schedule to FHFA. Any 

proposal under this section must be 

received by FHFA within 30 calendar 

days after receipt of the Notice of Intent. 

(b) Notification of decision. In 

response to a timely proposal by the 

employee, FHFA shall notify the 

employee whether the employee’s 

proposed repayment schedule is 

acceptable. FHFA has the discretion to 

accept, reject, or propose to the 

employee a modification of the 

proposed repayment schedule. 

(1) If FHFA decides that the proposed 

repayment schedule is unacceptable, the 

employee shall have 30 calendar days 

from the date he or she received notice 

of the decision in which to file a request 

for a hearing. 

(2) If FHFA decides that the proposed 

repayment schedule is acceptable or the 

employee agrees to a modification 

proposed by FHFA, an agreement shall 

be put in writing and signed by both the 

employee and FHFA. 

§ 1208.26 Special review where FHFA is 

the creditor agency. 

(a) Request for review.—(1) An 

employee subject to salary offset or a 

voluntary repayment agreement may, at 

any time, request a special review by 

FHFA of the amount of the salary offset 

or voluntary repayment, based on 

materially changed circumstances, 

including, but not limited to, 

catastrophic illness, divorce, death, or 

disability. 

(2) The request for special review 

must include an alternative proposed 

offset or payment schedule and a 

detailed statement, with supporting 

documents, that shows why the current 

salary offset or payments result in 

extreme financial hardship to the 

employee and his or her spouse and 

dependents. The detailed statement 

must indicate: 

(i) Income from all sources; 

(ii) Assets; 

(iii) Liabilities; 

(iv) Number of dependents; 

(v) Expenses for food, housing, 

clothing, and transportation; 

(vi) Medical expenses; and 

(vii) Exceptional expenses, if any. 

(b) Evaluation of request. FHFA shall 

evaluate the statement and supporting 

documents and determine whether the 

original offset or repayment schedule 

imposes extreme financial hardship on 

the employee, for example, by 

preventing the employee from meeting 

essential subsistence expenses such as 

food, housing, clothing, transportation, 

and medical care. FHFA shall notify the 

employee in writing within 30 calendar 

days of such determination, including, 

if appropriate, a revised offset or 

payment schedule. If the special review 

results in a revised offset or repayment 

schedule, FHFA shall provide a new 

certification to the paying agency. 

§ 1208.27 Notice of salary offset where 

FHFA is the paying agency. 

(a) Notice. Upon issuance of a proper 

certification by FHFA (for debts owed to 

FHFA) or upon receipt of a proper 

certification from another creditor 

agency, FHFA shall send the employee 

a written notice of salary offset. 

(b) Content of notice. Such written 

notice of salary offset shall advise the 

employee of the: 

(1) Certification that has been issued 

by FHFA or received from another 

creditor agency; 

(2) Amount of the debt and of the 

deductions to be made; and 


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(3) Date and pay period when the 

salary offset will begin. 

(c) If FHFA is not the creditor agency, 

FHFA shall provide a copy of the notice 

of salary offset to the creditor agency 

and advise the creditor agency of the 

dollar amount to be offset and the pay 

period when the offset will begin. 

§ 1208.28 Procedures for salary offset 

where FHFA is the paying agency. 

(a) Generally. FHFA shall coordinate 

salary deductions under this section and 

shall determine the amount of an 

employee’s disposable pay and the 

amount of the salary offset subject to the 

requirements in this section. Deductions 

shall begin the pay period following the 

issuance of the certification by FHFA or 

the receipt by FHFA of the certification 

from another agency, or as soon 

thereafter as possible. 

(b) Upon issuance of a proper 

certification by FHFA for debts owed to 

FHFA, or upon receipt of a proper 

certification from a creditor agency, 

FHFA shall send the employee a written 

notice of salary offset. Such notice shall 

advise the employee: 

(1) That certification has been issued 

by FHFA or received from another 

creditor agency; 

(2) Of the amount of the debt and of 

the deductions to be made; and 

provided for in the certification, and 

(3) Of the initiation of salary offset at 

the next officially established pay 

interval or as otherwise provided for in 

the certification. 

(c) Where appropriate, FHFA shall 

provide a copy of the notice to the 

creditor agency and advise such agency 

of the dollar amount to be offset and the 

pay period when the offset will begin. 

(d) Types of collection.—(1) Lumpsum payment. If the amount of the debt 

is equal to or less than 15 percent of the 

employee’s disposable pay, such debt 

ordinarily will be collected in one 

lump-sum payment. 

(2) Installment deductions. 

Installment deductions will be made 

over a period not greater than the 

anticipated period of employment. The 

size and frequency of installment 

deductions will bear a reasonable 

relation to the size of the debt and the 

employee’s ability to pay. However, the 

amount deducted for any pay period 

will not exceed 15 percent of the 

disposable pay from which the 

deduction is made unless the employee 

has agreed in writing to the deduction 

of a greater amount. The installment 

payment should normally be sufficient 

in size and frequency to liquidate the 

debt in no more than three years. 

Installment payments of less than $50 

should be accepted only in the most 

unusual circumstances. 

(3) Lump-sum deductions from final 

check. In order to liquidate a debt, a 

lump-sum deduction exceeding 15 

percent of disposable pay may be made 

pursuant to 31 U.S.C. 3716 from any 

final salary payment due a former 

employee, whether the former employee 

was separated voluntarily or 

involuntarily. 

(4) Lump-sum deductions from other 

sources. Whenever an employee subject 

to salary offset is separated from FHFA, 

and the balance of the debt cannot be 

liquidated by offset of the final salary 

check, FHFA may offset any later 

payments of any kind to the former 

employee to collect the balance of the 

debt pursuant to 31 U.S.C. 3716. 

(e) Multiple debts.—(1) Where two or 

more creditor agencies are seeking 

salary offset, or where two or more debts 

are owed to a single creditor agency, 

FHFA may, at its discretion, determine 

whether one or more debts should be 

offset simultaneously within the 15 

percent limitation. 

(2) In the event that a debt owed 

FHFA is certified while an employee is 

subject to salary offset to repay another 

agency, FHFA may, at its discretion, 

determine whether the debt to FHFA 

should be repaid before the debt to the 

other agency is repaid, repaid 

simultaneously with the other debt, or 

repaid after the debt to the other agency. 

(3) A levy pursuant to the Internal 

Revenue Code of 1986 shall take 

precedence over other deductions under 

this section, as provided in 5 U.S.C. 

5514(d). 

§ 1208.29 Coordinating salary offset with 

other agencies. 

(a) Responsibility of FHFA as the 

creditor agency.—(1) FHFA shall be 

responsible for: 

(i) Arranging for a hearing upon 

proper request by a Federal employee; 

(ii) Preparing the Notice of Intent 

consistent with the requirements of 

§ 1208.21; 

(iii) Obtaining hearing officials from 

other agencies pursuant to § 1208.23(b); 

and 

(iv) Ensuring that each certification of 

debt pursuant to § 1208.24(b) is sent to 

a paying agency. 

(2) Upon completion of the 

procedures set forth in §§ 1208.24 

through 1208.26, FHFA shall submit to 

the employee’s paying agency, if 

applicable, a certified debt claim and an 

installment agreement or other 

instruction on the payment schedule. 

(i) If the employee is in the process of 

separating from the Federal 

Government, FHFA shall submit its debt 

claim to the employee’s paying agency 

for collection by lump-sum deduction 

from the employee’s final check. The 

paying agency shall certify the total 

amount of its collection and furnish a 

copy of the certification to FHFA and to 

the employee. 

(ii) If the employee is already 

separated and all payments due from his 

or her former paying agency have been 

paid, FHFA may, unless otherwise 

prohibited, request that money due and 

payable to the employee from the 

Federal Government, including 

payments from the Civil Service 

Retirement and Disability Fund (5 CFR 

831.1801) or other similar funds, be 

administratively offset to collect the 

debt. 

(iii) When an employee transfers to 

another paying agency, FHFA shall not 

repeat the procedures described in 

§§ 1208.24 through 1208.26. Upon 

receiving notice of the employee’s 

transfer, FHFA shall review the debt to 

ensure that collection is resumed by the 

new paying agency. 

(b) Responsibility of FHFA as the 

paying agency.—(1) Complete claim. 

When FHFA receives a certified claim 

from a creditor agency, the employee 

shall be given written notice of the 

certification, the date salary offset will 

begin, and the amount of the periodic 

deductions. Deductions shall be 

scheduled to begin at the next officially 

established pay interval or as otherwise 

provided for in the certification. 

(2) Incomplete claim. When FHFA 

receives an incomplete certification of 

debt from a creditor agency, FHFA shall 

return the claim with notice that 

procedures under 5 U.S.C. 5514 and 

5 CFR 550.1104 must be followed, and 

that a properly certified claim must be 

received before FHFA will take action to 

collect the debt from the employee’s 

current pay account. 

(3) Review. FHFA is not authorized to 

review the merits of the creditor 

agency’s determination with respect to 

the amount or validity of the debt 

certified by the creditor agency. 

(4) Employees who transfer from one 

paying agency to another agency. If, 

after the creditor agency has submitted 

the debt claim to FHFA, the employee 

transfers to another agency before the 

debt is collected in full, FHFA must 

certify the total amount collected on the 

debt as required by 5 CFR 550.1109. 

One copy of the certification shall be 

furnished to the employee and one copy 

shall be sent to the creditor agency 

along with notice of the employee’s 

transfer. If FHFA is aware that the 

employee is entitled to payments from 

the Civil Service Retirement and 

Disability Fund or other similar 


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payments, it must provide written 

notification to the agency responsible 

for making such payments that the 

debtor owes a debt (including the 

amount) and that the requirements set 

forth herein and in 5 CFR part 550, 

subpart K, have been met. FHFA must 

submit a properly certified claim to the 

new payment agency before a collection 

can be made. 

§ 1208.30 Interest, penalties, and 

administrative costs. 

Where FHFA is the creditor agency, 

FHFA shall assess interest, penalties, 

and administrative costs pursuant to 31 

U.S.C. 3717 and the FCCS, 31 CFR 

chapter IX. 

§ 1208.31 Refunds. 

(a) Where FHFA is the creditor 

agency, FHFA shall promptly refund 

any amount deducted under the 

authority of 5 U.S.C. 5514 when: 

(1) FHFA receives notice that the debt 

has been waived or otherwise found not 

to be owing to the Federal Government; 

or 

(2) An administrative or judicial order 

directs FHFA to make a refund. 

(b) Unless required by law or contract, 

refunds under this section shall not bear 

interest. 

§ 1208.32 Request from a creditor agency 

for the services of a hearing official. 

(a) FHFA may provide qualified 

personnel to serve as hearing officials 

upon request of a creditor agency when: 

(1) The debtor is employed by FHFA 

and the creditor agency cannot provide 

a prompt and appropriate hearing before 

a hearing official furnished pursuant to 

another lawful arrangement; or 

(2) The debtor is employed by the 

creditor agency and that agency cannot 

arrange for a hearing official. 

(b) Services provided by FHFA to 

creditor agencies under this section 

shall be provided on a fully 

reimbursable basis pursuant to 31 U.S.C. 

1535, or other applicable authority. 

§ 1208.33 Non-waiver of rights by 

payments. 

A debtor’s payment, whether 

voluntary or involuntary, of all or any 

portion of a debt being collected 

pursuant to this subpart B shall not be 

construed as a waiver of any rights that 

the debtor may have under any statute, 

regulation, or contract, except as 

otherwise provided by law or contract. 

Subpart C—Administrative Offset 

§ 1208.40 Authority and scope. 

(a) The provisions of this subpart C 

apply to the collection of debts owed to 

the Federal Government arising from 

transactions with FHFA. Administrative 

offset is authorized under the Debt 

Collection Improvement Act of 1996 

(DCIA). This subpart C is consistent 

with the Federal Claims Collection 

Standards (FCCS) on administrative 

offset issued by the Department of 

Justice. 

(b) FHFA may collect a debt owed to 

the Federal Government from a person, 

organization, or other entity by 

administrative offset, pursuant to 31 

U.S.C. 3716, where: 

(1) The debt is certain in amount; 

(2) Administrative offset is feasible, 

desirable, and not otherwise prohibited; 

(3) The applicable statute of 

limitations has not expired; and 

(4) Administrative offset is in the best 

interest of the Federal Government. 

§ 1208.41 Collection. 

(a) FHFA may collect a claim from a 

person, organization, or other entity by 

administrative offset of monies payable 

by the Federal Government only after: 

(1) Providing the debtor with due 

process required under this part; and 

(2) Providing the paying agency with 

written certification that the debtor 

owes the debt in the amount stated and 

that FHFA, as creditor agency, has 

complied with this part. 

(b) Prior to initiating collection by 

administrative offset, FHFA should 

determine that the proposed offset is 

within the scope of this remedy, as set 

forth in 31 CFR 901.3(a). Administrative 

offset under 31 U.S.C. 3716 may not be 

used to collect debts more than 10 years 

after the Federal Government’s right to 

collect the debt first accrued, except as 

otherwise provided by law. In addition, 

administrative offset may not be used 

when a statute explicitly prohibits its 

use to collect the claim or type of claim 

involved. 

(c) Unless otherwise provided, debts 

or payments not subject to 

administrative offset under 31 U.S.C. 

3716 may be collected by administrative 

offset under common law, or any other 

applicable statutory authority. 

§ 1208.42 Administrative offset prior to 

completion of procedures. 

FHFA shall not be required to follow 

the procedures described in § 1208.43 

where: 

(a) Prior to the completion of the 

procedures described in § 1208.43, 

FHFA may effect administrative offset if 

failure to offset would substantially 

prejudice its ability to collect the debt, 

and if the time before the payment is to 

be made does not reasonably permit 

completion of the procedures described 

in § 1208.43. Such prior administrative 

offset shall be followed promptly by the 

completion of the procedures described 

in § 1208.43. Amounts recovered by 

administrative offset but later found not 

to be owed to FHFA shall be promptly 

refunded. This section applies only to 

administrative offset pursuant to 31 CFR 

901.3(c), and does not apply when debts 

are referred to the Department of the 

Treasury for mandatory centralized 

administrative offset under 31 CFR 

901.3(b)(1). 

(b) The administrative offset is in the 

nature of a recoupment (i.e., FHFA may 

offset a payment due to the debtor when 

both the payment due to the debtor and 

the debt owed to FHFA arose from the 

same transaction); or 

(c) In the case of non-centralized 

administrative offsets, FHFA first learns 

of the existence of a debt due when 

there would be insufficient time to 

afford the debtor due process under 

these procedures before the paying 

agency makes payment to the debtor; in 

such cases, the Director shall give the 

debtor notice and an opportunity for 

review as soon as practical and shall 

refund any money ultimately found not 

to be due to the Federal Government. 

§ 1208.43 Procedures. 

Unless the procedures described in 

§ 1208.42 are used, prior to collecting 

any debt by administrative offset or 

referring such claim to another agency 

for collection through administrative 

offset, FHFA shall provide the debtor 

with the following: 

(a) Written notification of the nature 

and amount of the debt, the intention of 

FHFA to collect the debt through 

administrative offset, and a statement of 

the rights of the debtor under this 

section; 

(b) An opportunity to inspect and 

copy the records of FHFA related to the 

debt that are not exempt from 

disclosure; 

(c) An opportunity for review within 

FHFA of the determination of 

indebtedness. Any request for review by 

the debtor shall be in writing and shall 

be submitted to FHFA within 30 

calendar days of the date of the notice 

of the offset. FHFA may waive the time 

limits for requesting review for good 

cause shown by the debtor. FHFA shall 

provide the debtor with a reasonable 

opportunity for an oral hearing when: 

(1) An applicable statute authorizes or 

requires FHFA to consider waiver of the 

indebtedness involved, the debtor 

requests waiver of the indebtedness, and 

the waiver determination turns on an 

issue of credibility or veracity; or 

(2) The debtor requests 

reconsideration of the debt and FHFA 

determines that the question of the 

indebtedness cannot be resolved by 


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review of the documentary evidence, as 

for example, when the validity of the 

debt turns on an issue of credibility or 

veracity. Unless otherwise required by 

law, an oral hearing under this subpart 

C is not required to be a formal 

evidentiary hearing, although FHFA 

shall document all significant matters 

discussed at the hearing. In those cases 

where an oral hearing is not required by 

this subpart C, FHFA shall make its 

determination on the request for waiver 

or reconsideration based upon a review 

of the written record; and 

(d) An opportunity to enter into a 

written agreement for the voluntary 

repayment of the amount of the claim at 

the discretion of FHFA. 

§ 1208.44 Interest, penalties, and 

administrative costs. 

FHFA shall assess interest, penalties, 

and administrative costs on debts owed 

to the Federal Government, in 

accordance with 31 U.S.C. 3717 and the 

FCCS. FHFA may also assess interest 

and related charges on debts that are not 

subject to 31 U.S.C. 3717 and the FCCS 

to the extent authorized under the 

common law or other applicable 

statutory authority. 

§ 1208.45 Refunds. 

FHFA shall refund promptly those 

amounts recovered by administrative 

offset but later found not to be owed to 

the Federal Government. Unless 

required by law or contract, such 

refunds shall not bear interest. 

§ 1208.46 No requirement for duplicate 

notice. 

Where FHFA has previously given a 

debtor any of the required notice and 

review opportunities with respect to a 

particular debt, FHFA is not required to 

duplicate such notice and review 

opportunities prior to initiating 

administrative offset. 

§ 1208.47 Requests for administrative 

offset to other Federal agencies. 

(a) FHFA may request that a debt 

owed to FHFA be collected by 

administrative offset against funds due 

and payable to a debtor by another 

agency. 

(b) In requesting administrative offset, 

FHFA, as creditor, shall certify in 

writing to the agency holding funds of 

the debtor: 

(1) That the debtor owes the debt; 

(2) The amount and basis of the debt; 

and 

(3) That FHFA has complied with the 

requirements of its own administrative 

offset regulations and the applicable 

provisions of the FCCS with respect to 

providing the debtor with due process, 

unless otherwise provided. 

§ 1208.48 Requests for administrative 

offset from other Federal agencies. 

(a) Any agency may request that funds 

due and payable to a debtor by FHFA 

be administratively offset in order to 

collect a debt owed to such agency by 

the debtor. 

(b) FHFA shall initiate the requested 

administrative offset only upon: 

(1) Receipt of written certification 

from the creditor agency that: 

(i) The debtor owes the debt, 

including the amount and basis of the 

debt; 

(ii) The agency has prescribed 

regulations for the exercise of 

administrative offset; and 

(iii) The agency has complied with its 

own administrative offset regulations 

and with the applicable provisions of 

the FCCS, including providing any 

required hearing or review. 

(2) A determination by FHFA that 

collection by administrative offset 

against funds payable by FHFA would 

be in the best interest of the Federal 

Government as determined by the facts 

and circumstances of the particular case 

and that such administrative offset 

would not otherwise be contrary to law. 

§ 1208.49 Administrative offset against 

amounts payable from Civil Service 

Retirement and Disability Fund. 

(a) Request for administrative offset. 

Unless otherwise prohibited by law, 

FHFA may request that monies that are 

due and payable to a debtor from the 

Civil Service Retirement and Disability 

Fund (Fund) be offset administratively 

in reasonable amounts in order to 

collect in one full payment or in a 

minimal number of payments debt owed 

to FHFA by the debtor. Such requests 

shall be made to the appropriate 

officials of OPM in accordance with 

such regulations as may be prescribed 

by FHFA or OPM. 

(b) Contents of certification. When 

making a request for administrative 

offset under paragraph (a) of this 

section, FHFA shall provide OPM with 

a written certification that: 

(1) The debtor owes FHFA a debt, 

including the amount of the debt; 

(2) FHFA has complied with the 

applicable statutes, regulations, and 

procedures of OPM; and 

(3) FHFA has complied with the 

requirements of the FCCS, including 

any required hearing or review. 

(c) If FHFA decides to request 

administrative offset under paragraph 

(a) of this section, it shall make the 

request as soon as practicable after 

completion of the applicable 

procedures. This will satisfy any 

requirement that administrative offset 

be initiated prior to the expiration of the 

applicable statute of limitations. At such 

time as the debtor makes a claim for 

payments from the Fund, if at least one 

year has elapsed since the 

administrative offset request was 

originally made, the debtor shall be 

permitted to offer a satisfactory 

repayment plan in lieu of administrative 

offset if he or she establishes that 

changed financial circumstances would 

render the administrative offset unjust. 

(d) If FHFA collects part or all of the 

debt by other means before deductions 

are made or completed pursuant to 

paragraph (a) of this section, FHFA shall 

act promptly to modify or terminate its 

request for administrative offset under 

paragraph (a) of this section. 

Subpart D—Tax Refund Offset 

§ 1208.50 Authority and scope. 

The provisions of 26 U.S.C. 6402(d) 

and 31 U.S.C. 3720A authorize the 

Secretary of the Treasury to offset a 

delinquent debt owed the Federal 

Government from the tax refund due a 

taxpayer when other collection efforts 

have failed to recover the amount due. 

In addition, FHFA is authorized to 

collect debts by means of administrative 

offset under 31 U.S.C. 3716 and, as part 

of the debt collection process, to notify 

the United States Department of 

Treasury’s Financial Management 

Service of the amount of such debt for 

collection by tax refund offset. 

§ 1208.51 Definitions. 

The following terms apply to this 

subpart D— 

Debt or claim means an amount of 

money, funds or property which has 

been determined by FHFA to be due to 

the Federal Government from any 

person, organization, or entity, except 

another Federal agency. 

(1) A debt becomes eligible for tax 

refund offset procedures if: 

(i) It cannot currently be collected 

pursuant to the salary offset procedures 

of 5 U.S.C. 5514(a)(1); 

(ii) The debt is ineligible for 

administrative offset or cannot be 

collected currently by administrative 

offset; and 

(iii) The requirements of this section 

are otherwise satisfied. 

(2) All judgment debts are past due for 

purposes of this subpart D. Judgment 

debts remain past due until paid in full. 

Debtor means a person who owes a 

debt or a claim. The term ‘‘person’’ 

includes any individual, organization or 

entity, except another Federal agency. 

Dispute means a written statement 

supported by documentation or other 

evidence that all or part of an alleged 

debt is not past due or legally 


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enforceable, that the amount is not the 

amount currently owed, that the 

outstanding debt has been satisfied, or 

in the case of a debt reduced to 

judgment, that the judgment has been 

satisfied or stayed. 

Notice means the information sent to 

the debtor pursuant to § 1208.53. The 

date of the notice is that date shown on 

the notice letter as its date of issuance. 

Tax refund offset means withholding 

or reducing a tax refund payment by an 

amount necessary to satisfy a debt owed 

by the payee(s) of a tax refund payment. 

Tax refund payment means any 

overpayment of Federal taxes to be 

refunded to the person making the 

overpayment after the Internal Revenue 

Service (IRS) makes the appropriate 

credits. 

§ 1208.52 Procedures. 

(a) Referral to the Department of the 

Treasury.—(1) FHFA may refer any past 

due, legally enforceable nonjudgment 

debt of an individual, organization, or 

entity to the Department of the Treasury 

for tax refund offset if FHFA’s or the 

referring agency’s rights of action 

accrued more than three months but less 

than 10 years before the offset is made. 

(2) Debts reduced to judgment may be 

referred at any time. 

(3) Debts in amounts lower than $25 

are not subject to referral. 

(4) In the event that more than one 

debt is owed, the tax refund offset 

procedures shall be applied in the order 

in which the debts became past due. 

(5) FHFA shall notify the Department 

of the Treasury of any change in the 

amount due promptly after receipt of 

payment or notice of other reductions. 

(b) Notice. FHFA shall provide the 

debtor with written notice of its intent 

to offset before initiating the offset. 

Notice shall be mailed to the debtor at 

the current address of the debtor, as 

determined from information obtained 

from the Internal Revenue Service 

pursuant to 26 U.S.C. 6103(m)(2), (4), (5) 

or maintained by FHFA. The notice sent 

to the debtor shall state the amount of 

the debt and inform the debtor that: 

(1) The debt is past due; 

(2) FHFA intends to refer the debt to 

the Department of the Treasury for offset 

from tax refunds that may be due to the 

taxpayer; 

(3) FHFA intends to provide 

information concerning the delinquent 

debt exceeding $100 to a consumer 

reporting bureau unless such debt has 

already been disclosed; and 

(4) Before the debt is reported to a 

consumer reporting agency, if 

applicable, and referred to the 

Department of the Treasury for offset 

from tax refunds, the debtor has 65 

calendar days from the date of notice to 

request a review under paragraph (d) of 

this section. 

(c) Report to consumer reporting 

agency. If the debtor neither pays the 

amount due nor presents evidence that 

the amount is not past due or is satisfied 

or stayed, FHFA will report the debt to 

a consumer reporting agency at the end 

of the notice period, if applicable, and 

refer the debt to the Department of the 

Treasury for offset from the taxpayer’s 

Federal tax refund. FHFA shall certify to 

the Department of the Treasury that 

reasonable efforts have been made by 

FHFA to obtain payment of such debt. 

(d) Request for review. A debtor may 

request a review by FHFA if he or she 

believes that all or part of the debt is not 

past due or is not legally enforceable, or 

in the case of a judgment debt, that the 

debt has been stayed or the amount 

satisfied, as follows: 

(1) The debtor must send a written 

request for review to FHFA at the 

address provided in the notice. 

(2) The request must state the amount 

disputed and reasons why the debtor 

believes that the debt is not past due, is 

not legally enforceable, has been 

satisfied, or if a judgment debt, has been 

satisfied or stayed. 

(3) The request must include any 

documents that the debtor wishes to be 

considered or state that additional 

information will be submitted within 

the time permitted. 

(4) If the debtor wishes to inspect 

records establishing the nature and 

amount of the debt, the debtor must 

make a written request to FHFA for an 

opportunity for such an inspection. The 

office holding the relevant records not 

exempt from disclosure shall make them 

available for inspection during normal 

business hours within one week from 

the date of receipt of the request. 

(5) The request for review and any 

additional information submitted 

pursuant to the request must be received 

by FHFA at the address stated in the 

notice within 65 calendar days of the 

date of issuance of the notice. 

(6) In reaching its decision, FHFA 

shall review the dispute and shall 

consider its records and any 

documentation and arguments 

submitted by the debtor. FHFA shall 

send a written notice of its decision to 

the debtor. There is no administrative 

appeal of this decision. 

(7) If the evidence presented by the 

debtor is considered by a non-FHFA 

agent or other entities or persons acting 

on behalf of FHFA, the debtor shall be 

accorded at least 30 calendar days from 

the date the agent or other entity or 

person determines that all or part of the 

debt is past due and legally enforceable 

to request review by FHFA of any 

unresolved dispute. 

(8) Any debt that previously has been 

reviewed pursuant to this section or any 

other section of this part, or that has 

been reduced to a judgment, may not be 

disputed except on the grounds of 

payments made or events occurring 

subsequent to the previous review or 

judgment. 

(9) To the extent that a debt owed has 

not been established by judicial or 

administrative order, a debtor may 

dispute the existence or amount of the 

debt or the terms of repayment. With 

respect to debts established by a judicial 

or administrative order, FHFA review 

will be limited to issues concerning the 

payment or other discharge of the debt. 

§ 1208.53 No requirement for duplicate 

notice. 

Where FHFA has previously given a 

debtor any of the required notice and 

review opportunities with respect to a 

particular debt, FHFA is not required to 

duplicate such notice and review 

opportunities prior to initiating tax 

refund offset. 

§ 1208.54 to 1208.59 [Reserved] 

Subpart E—Administrative Wage 

Garnishment 

§ 1208.60 Scope and purpose. 

These administrative wage 

garnishment procedures are issued in 

compliance with 31 U.S.C. 3720D and 

31 CFR 285.11(f). This subpart E 

provides procedures for FHFA to collect 

money from a debtor’s disposable pay 

by means of administrative wage 

garnishment. The receipt of payments 

pursuant to this subpart E does not 

preclude FHFA from pursuing other 

debt collection remedies, including the 

offset of Federal payments. FHFA may 

pursue such debt collection remedies 

separately or in conjunction with 

administrative wage garnishment. This 

subpart E does not apply to the 

collection of delinquent debts from the 

wages of Federal employees from their 

Federal employment. Federal pay is 

subject to the Federal salary offset 

procedures set forth in 5 U.S.C. 5514 

and other applicable laws. 

§ 1208.61 Notice. 

At least 30 days before the initiation 

of garnishment proceedings, FHFA will 

send, by first class mail to the debtor’s 

last known address, a written notice 

informing the debtor of: 

(a) The nature and amount of the debt; 

(b) FHFA’s intention to initiate 

proceedings to collect the debt through 

deductions from the debtor’s pay until 

the debt and all accumulated interest 


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penalties and administrative costs are 

paid in full; 

(c) An explanation of the debtor’s 

rights as set forth in § 1208.62(c); and 

(d) The time frame within which the 

debtor may exercise these rights. FHFA 

shall retain a stamped copy of the notice 

indicating the date the notice was 

mailed. 

§ 1208.62 Debtor’s rights. 

FHFA shall afford the debtor the 

opportunity: 

(a) To inspect and copy records 

related to the debt; 

(b) To enter into a written repayment 

agreement with FHFA, under terms 

agreeable to FHFA; and 

(c) To the extent that a debt owed has 

not been established by judicial or 

administrative order, to request a 

hearing concerning the existence or 

amount of the debt or the terms of the 

repayment schedule. With respect to 

debts established by a judicial or 

administrative order, a debtor may 

request a hearing concerning the 

payment or other discharge of the debt. 

The debtor is not entitled to a hearing 

concerning the terms of the proposed 

repayment schedule if these terms have 

been established by written agreement. 

§ 1208.63 Form of hearing. 

(a) If the debtor submits a timely 

written request for a hearing as provided 

in § 1208.62(c), FHFA will afford the 

debtor a hearing, which at FHFA’s 

option may be oral or written. FHFA 

will provide the debtor with a 

reasonable opportunity for an oral 

hearing when FHFA determines that the 

issues in dispute cannot be resolved by 

review of the documentary evidence, for 

example, when the validity of the claim 

turns on the issue of credibility or 

veracity. 

(b) If FHFA determines that an oral 

hearing is appropriate, the time and 

location of the hearing shall be 

established by FHFA. An oral hearing 

may, at the debtor’s option, be 

conducted either in person or by 

telephone conference. All travel 

expenses incurred by the debtor in 

connection with an in-person hearing 

will be borne by the debtor. All 

telephonic charges incurred during the 

hearing will be the responsibility of the 

agency. 

(c) In cases when it is determined that 

an oral hearing is not required by this 

section, FHFA will accord the debtor a 

‘‘paper hearing,’’ that is, FHFA will 

decide the issues in dispute based upon 

a review of the written record. 

§ 1208.64 Effect of timely request. 

If FHFA receives a debtor’s written 

request for a hearing within 15 business 

days of the date FHFA mailed its notice 

of intent to seek garnishment, FHFA 

shall not issue a withholding order until 

the debtor has been provided the 

requested hearing, and a decision in 

accordance with § 1208.68 and 

§ 1208.69 has been rendered. 

§ 1208.65 Failure to timely request a 

hearing. 

If FHFA receives a debtor’s written 

request for a hearing after 15 business 

days of the date FHFA mailed its notice 

of intent to seek garnishment, FHFA 

shall provide a hearing to the debtor. 

However, FHFA will not delay issuance 

of a withholding order unless it 

determines that the untimely filing of 

the request was caused by factors over 

which the debtor had no control, or 

FHFA receives information that FHFA 

believes justifies a delay or cancellation 

of the withholding order. 

§ 1208.66 Hearing official. 

A hearing official may be any 

qualified individual, as determined by 

FHFA, including an administrative law 

judge. 

§ 1208.67 Procedure. 

After the debtor requests a hearing, 

the hearing official shall notify the 

debtor of: 

(a) The date and time of a telephonic 

hearing; 

(b) The date, time, and location of an 

in-person oral hearing; or 

(c) The deadline for the submission of 

evidence for a written hearing. 

§ 1208.68 Format of hearing. 

FHFA will have the burden of proof 

to establish the existence or amount of 

the debt. Thereafter, if the debtor 

disputes the existence or amount of the 

debt, the debtor must prove by a 

preponderance of the evidence that no 

debt exists, or that the amount of the 

debt is incorrect. In addition, the debtor 

may present evidence that the terms of 

the repayment schedule are unlawful, 

would cause a financial hardship to the 

debtor, or that collection of the debt 

may not be pursued due to operation of 

law. The hearing official shall maintain 

a record of any hearing held under this 

section. Hearings are not required to be 

formal, and evidence may be offered 

without regard to formal rules of 

evidence. Witnesses who testify in oral 

hearings shall do so under oath or 

affirmation. 

§ 1208.69 Date of decision. 

The hearing official shall issue a 

written opinion stating his or her 

decision as soon as practicable, but not 

later than 60 days after the date on 

which the request for such hearing was 

received by FHFA. If FHFA is unable to 

provide the debtor with a hearing and 

decision within 60 days after the receipt 

of the request for such hearing: 

(a) FHFA may not issue a withholding 

order until the hearing is held and a 

decision rendered; or 

(b) If FHFA had previously issued a 

withholding order to the debtor’s 

employer, the withholding order will be 

suspended beginning on the 61st day 

after the date FHFA received the hearing 

request and continuing until a hearing 

is held and a decision is rendered. 

§ 1208.70 Content of decision. 

The written decision shall include: 

(a) A summary of the facts presented; 

(b) The hearing official’s findings, 

analysis and conclusions; and 

(c) The terms of any repayment 

schedule, if applicable. 

§ 1208.71 Finality of agency action. 

A decision by a hearing official shall 

become the final decision of FHFA for 

the purpose of judicial review under the 

Administrative Procedure Act. 

§ 1208.72 Failure to appear. 

In the absence of good cause shown, 

a debtor who fails to appear at a 

scheduled hearing will be deemed as 

not having timely filed a request for a 

hearing. 

§ 1208.73 Wage garnishment order. 

(a) Unless FHFA receives information 

that it believes justifies a delay or 

cancellation of the withholding order, 

FHFA will send by first class mail a 

withholding order to the debtor’s 

employer within 30 calendar days after 

the debtor fails to make a timely request 

for a hearing (i.e., within 15 business 

days after the mailing of the notice of 

FHFA’s intent to seek garnishment) or, 

if a timely request for a hearing is made 

by the debtor, within 30 calendar days 

after a decision to issue a withholding 

order becomes final. 

(b) The withholding order sent to the 

employer will be in the form prescribed 

by the Secretary of the Treasury, on 

FHFA’s letterhead, and signed by the 

head of the agency or delegate. The 

order will contain all information 

necessary for the employer to comply 

with the withholding order, including 

the debtor’s name, address, and social 

security number, as well as instructions 

for withholding and information as to 

where payments should be sent. 

(c) FHFA will keep a stamped copy of 

the order indicating the date it was 

mailed. 

§ 1208.74 Certification by employer. 

Along with the withholding order, 

FHFA will send to the employer a 


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Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Rules and Regulations 68969 

certification in a form prescribed by the 

Secretary of the Treasury. The employer 

shall complete and return the 

certification to FHFA within the time 

frame prescribed in the instructions to 

the form. The certification will address 

matters such as information about the 

debtor’s employment status and 

disposable pay available for 

withholding. 

§ 1208.75 Amounts withheld. 

(a) Upon receipt of the garnishment 

order issued under this section, the 

employer shall deduct from all 

disposable pay paid to the debtor during 

each pay period the amount of 

garnishment described in paragraphs (b) 

through (d) of this section. 

(b) Subject to the provisions of 

paragraphs (c) and (d) of this section, 

the amount of garnishment shall be the 

lesser of: 

(1) The amount indicated on the 

garnishment order up to 15 percent of 

the debtor’s disposable pay; or 

(2) The amount set forth in 15 U.S.C. 

1673(a)(2). The amount set forth at 15 

U.S.C. 1673(a)(2) is the amount by 

which the debtor’s disposable pay 

exceeds an amount equivalent to thirty 

times the minimum wage. 

(c) When a debtor’s pay is subject to 

withholding orders with priority, the 

following shall apply: 

(1) Unless otherwise provided by 

Federal law, withholding orders issued 

under this section shall be paid in the 

amounts set forth under paragraph (b) of 

this section and shall have priority over 

other withholding orders which are 

served later in time. However, 

withholding orders for family support 

shall have priority over withholding 

orders issued under this section. 

(2) If amounts are being withheld 

from a debtor’s pay pursuant to a 

withholding order served on an 

employer before a withholding order 

issued pursuant to this section, or if a 

withholding order for family support is 

served on an employer at any time, the 

amounts withheld pursuant to the 

withholding order issued under this 

section shall be the lesser of: 

(i) The amount calculated under 

paragraph (b) of this section; or 

(ii) An amount equal to 25 percent of 

the debtor’s disposable pay less the 

amount(s) withheld under the 

withholding order(s) with priority. 

(3) If a debtor owes more than one 

debt to FHFA, FHFA may issue multiple 

withholding orders. The total amount 

garnished from the debtor’s pay for such 

orders will not exceed the amount set 

forth in paragraph (b) of this section. 

(d) An amount greater than that set 

forth in paragraphs (b) and (c) of this 

section may be withheld upon the 

written consent of the debtor. 

(e) The employer shall promptly pay 

to FHFA all amounts withheld in 

accordance with the withholding order 

issued pursuant to this section. 

(f) An employer shall not be required 

to vary its normal pay and disbursement 

cycles in order to comply with the 

withholding order. 

(g) Any assignment or allotment by 

the employee of the employee’s earnings 

shall be void to the extent it interferes 

with or prohibits execution of the 

withholding order under this section, 

except for any assignment or allotment 

made pursuant to a family support 

judgment or order. 

(h) The employer shall withhold the 

appropriate amount from the debtor’s 

wages for each pay period until the 

employer receives notification from 

FHFA to discontinue wage withholding. 

The garnishment order shall indicate a 

reasonable period of time within which 

the employer is required to commence 

wage withholding. 

§ 1208.76 Exclusions from garnishment. 

FHFA will not garnish the wages of a 

debtor it knows has been involuntarily 

separated from employment until the 

debtor has been re-employed 

continuously for at least 12 months. The 

debtor has the burden of informing 

FHFA of the circumstances surrounding 

an involuntary separation from 

employment. 

§ 1208.77 Financial hardship. 

(a) A debtor whose wages are subject 

to a wage withholding order under this 

section, may, at any time, request a 

review by FHFA of the amount 

garnished, based on materially changed 

circumstances such as disability, 

divorce, or catastrophic illness which 

result in financial hardship. 

(b) A debtor requesting a review 

under this section shall submit the basis 

for claiming that the current amount of 

garnishment results in a financial 

hardship to the debtor, along with 

supporting documentation. 

(c) If a financial hardship is found, 

FHFA will downwardly adjust, by an 

amount and for a period of time 

agreeable to FHFA, the amount 

garnished to reflect the debtor’s 

financial condition. FHFA will notify 

the employer of any adjustments to the 

amounts to be withheld. 

§ 1208.78 Ending garnishment. 

(a) Once FHFA has fully recovered the 

amounts owed by the debtor, including 

interest, penalties, and administrative 

costs consistent with the Federal Claims 

Collection Standards, FHFA will send 

the debtor’s employer notification to 

discontinue wage withholding. 

(b) At least annually, FHFA will 

review its debtors’ accounts to ensure 

that garnishment has been terminated 

for accounts that have been paid in full. 

§ 1208.79 Prohibited actions by employer. 

The Debt Collection Improvement Act 

of 1996 prohibits an employer from 

discharging, refusing to employ, or 

taking disciplinary action against the 

debtor due to the issuance of a 

withholding order under this subpart E. 

§ 1208.80 Refunds. 

(a) If a hearing official determines that 

a debt is not legally due and owing to 

the United States, FHFA shall promptly 

refund any amount collected by means 

of administrative wage garnishment. 

(b) Unless required by Federal law or 

contract, refunds under this section 

shall not bear interest. 

§ 1208.81 Right of action. 

FHFA may sue any employer for any 

amount that the employer fails to 

withhold from wages owed and payable 

to its employee in accordance with this 

subpart E. However, a suit will not be 

filed before the termination of the 

collection action involving a particular 

debtor, unless earlier filing is necessary 

to avoid expiration of any applicable 

statute of limitations. For purposes of 

this subpart E, ‘‘termination of the 

collection action’’ occurs when the 

agency has terminated collection action 

in accordance with the FCCS or other 

applicable standards. In any event, 

termination of the collection action will 

have been deemed to occur if FHFA has 

not received any payments to satisfy the 

debt from the particular debtor whose 

wages were subject to garnishment, in 

whole or in part, for a period of one (1) 

year. 

CHAPTER XVII—OFFICE OF FEDERAL 

HOUSING ENTERPRISE OVERSIGHT, 

DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT 

PART 1704—[REMOVED] 

■ 2. Remove part 1704. 

Dated: November 3, 2010. 

Edward J. DeMarco, 

Acting Director, Federal Housing Finance 

Agency. 

[FR Doc. 2010–28261 Filed 11–9–10; 8:45 am] 

BILLING CODE 8070–01–P 


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