This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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REGISTER issue of each week.

Rules and Regulations Federal Register

41677 

Vol. 78, No. 133 

Thursday, July 11, 2013 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1073 

[Docket No.: CFPB–2013–0021] 

Procedures for Bureau Debt Collection 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: This rule implements the 

Bureau of Consumer Financial 

Protection’s debt collection regulations. 

These regulations conform to 

requirements set forth in laws 

applicable to the collection of nontax 

debts owed to the United States. 

DATES: This rule is effective July 11, 

2013. 

FOR FURTHER INFORMATION CONTACT: 

David Snyder, Attorney-Advisor, Legal 

Division, Consumer Financial 

Protection Bureau, 1700 G Street NW., 

Washington, DC 20552 at 202–435– 

7758. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This rule implements the Debt 

Collection Improvement Act of 1996 

(DCIA), which applies to non-tax debts 

owed to the United States government, 

with respect to the Bureau of Consumer 

Financial Protection (CFPB or Bureau). 

The DCIA requires Federal agencies to 

collect debts owed to the United States 

under regulations prescribed by the 

head of each agency and standards 

prescribed by the Department of Justice 

and the Department of Treasury. 31 

U.S.C. 3711. These standards, known as 

the Federal Claims Collection Standards 

(FCCS), became effective on December 

22, 2000. 31 CFR Parts 900 through 904. 

The DCIA also requires agencies, prior 

to collecting debts owed to the United 

States by administrative offset, to: (1) 

Adopt without change the FCCS on 

collecting debts by administrative offset; 

or (2) prescribe agency regulations for 

collecting such debts by administrative 

offset which are consistent with the 

FCCS. 31 U.S.C. 3716(b). Those agency 

regulations must set forth the 

procedural protections that the agency 

provides to a debtor when the agency 

seeks to collect a debt by administrative 

offset. 

The Bureau has decided to issue its 

own regulations for debt collection and 

administrative offset. The regulations 

are consistent with the FCCS, as 

required by the DCIA. The salary offset 

portion of the regulations has been 

submitted to and approved by the Office 

of Personnel Management (OPM), as 

required by 5 U.S.C. 5514. In addition, 

the administrative wage garnishment 

provisions of the regulations satisfy the 

prerequisite in 31 CFR 285.11(f) that the 

Bureau adopt regulations for the 

conduct of administrative wage 

garnishment hearings consistent with 31 

CFR 285.11. The tax refund offset 

provisions of the regulations satisfy the 

prerequisite in 31 CFR 285.2(c) that the 

Bureau adopt regulations authorizing its 

collection of debts by tax refund offset. 

II. Summary of the Rule 

Subpart A—Scope, Purpose, and 

Definitions 

This part establishes Bureau 

procedures for the collection of certain 

debts owed to the United States. In 

addition to the procedures set forth in 

this rule, the Bureau shall also follow 

the procedures set forth in 5 CFR part 

550, subpart K, for the collection by 

offset from indebted government 

employees, and in 31 CFR part 285 and 

the FCCS (31 CFR parts 900 through 

904) for the collection of non-tax debts 

owed to the United States. These 

regulations govern the following areas of 

the debt collection process: Prompt 

demand of payment of the claim from 

the debtor; review, upon the debtor’s 

demand for a final agency 

determination, of whether the amount 

claimed is accurate; collection of debts 

in installment payments; assessment of 

interest, penalties, and administrative 

costs on debts claimed; compromise of 

claims; determinations whether to 

suspend or terminate collection action; 

referral of delinquent debts to the 

Secretary of the Treasury for collection 

by means of centralized administrative 

offset under the Treasury Offset 

Program; reporting of debts to consumer 

reporting agencies; use of credit reports; 

and the sale of delinquent debts. When 

the Bureau elects to pursue a specific 

debt collection remedy such as salary 

offset, administrative wage garnishment, 

or offset against tax refunds, the Bureau 

shall follow the applicable procedures 

for that debt collection remedy set forth 

in these regulations. 

Subpart B—Administrative Offset 

Pursuant to 31 U.S.C. 3716, the 

Bureau may, in appropriate 

circumstances, collect debts owed to the 

United States through administrative 

offset. Under the administrative offset 

regulations, the Bureau is authorized to 

collect debts owed to the United States 

by: (1) Withholding money payable by 

the Bureau to the debtor or held by the 

Bureau for the debtor; (2) requesting that 

another Federal agency withhold money 

payable to the debtor or held by the 

agency for the debtor; or (3) referring the 

debts to the Secretary of the Treasury or 

a designated debt collection center for 

collection under the Treasury’s 

centralized offset program. Subpart B of 

the regulations satisfies the prerequisite 

under 31 U.S.C. 3716(b) that the Bureau 

promulgate regulations for 

administrative offset procedures that are 

consistent with the FCCS. Subpart B of 

the regulations also satisfies the 

prerequisite under 31 CFR 901.3 that the 

Bureau prescribe specified 

administrative offset regulations prior to 

conducting administrative offset. 

Subpart C—Salary Offset 

Subpart C of the regulations provides 

that when the Bureau collects a debt by 

means of deductions from the current 

pay account of a Bureau employee, or 

any individual currently employed by 

the Federal Government (including a 

former Bureau employee), the Bureau 

shall initiate salary offset under 5 U.S.C. 

5514(a)(1). Salary offset is a form of 

administrative offset governed by statute 

(5 U.S.C. 5514) and by regulations 

issued by the Office of Personnel 

Management (OPM) (5 CFR part 550, 

subpart K). The statute authorizing 

salary offset requires agencies to 

promulgate regulations to carry out 

salary offset subject to OPM approval. 5 

U.S.C. 5514(b)(1). Subpart C implements 

those statutory requirements. 


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Subpart D—Administrative Wage 

Garnishment 

Subpart D of the regulations 

incorporates by reference 31 CFR 

285.11, which sets forth procedures that 

agencies may use to collect debts by 

garnishing the wages of individuals 

employed outside the Federal 

Government. This includes persons 

employed by the private sector, as well 

as state and local governments. The 

administrative wage garnishment 

regulations do not apply to the 

collection of delinquent debts from the 

wages of Federal employees; Federal 

pay is subject to the Federal salary offset 

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

and other applicable laws, including 

Subpart C of these regulations. Subpart 

D of the regulations meets the 

requirement under 31 CFR 285.11(f) that 

the Bureau promulgate regulations 

governing the conduct of administrative 

wage garnishment hearings consistent 

with that section or adopt by reference 

the section without change. 

Subpart E—Tax Refund Offset 

Where collection by salary offset or 

administrative offset is not feasible, the 

Bureau also may seek to recover a 

legally enforceable, past-due debt owed 

to the United States by requesting that 

the Financial Management Service of 

the Department of the Treasury offset all 

or part of a tax refund to a debtor by the 

amount of the debt and pay such money 

to the Bureau. 31 U.S.C. 3720A; 26 CFR 

301.6402–1 through .6402–6. In order to 

collect a debt by means of a tax refund 

offset, the Bureau is required to 

promulgate its own regulations under 31 

U.S.C. 3716 and 31 U.S.C. 3720A, 

governing its authority to collect debts 

by administrative offset, including offset 

of tax refund payments. 31 U.S.C. 

3720A(b)(4); 31 CFR 285.2(c). Subpart E 

of the regulations implements this 

requirement. 

III. Legal Authority and Effective Date 

This rule is issued under the DCIA, 31 

U.S.C. 3711 et seq., which in part 

authorizes the Bureau to collect certain 

debts owed to the United States. It is 

also issued under 5 U.S.C. 5514, which 

in part authorizes the Bureau to collect 

certain debts owed to the United States 

via salary offset. 

This rule is procedural and not 

substantive and, thus, is not subject to 

the 30-day delay in effective date 

required by 5 U.S.C. 553(d). The Bureau 

is making the rule effective immediately 

upon publication in the Federal 

Register. 

IV. Regulatory Requirements 

No notice of proposed rulemaking is 

required under the Administrative 

Procedure Act (APA) because this rule 

relates solely to agency procedure and 

practice. 5 U.S.C. 553(b). Because no 

notice of proposed rulemaking is 

required, the Regulatory Flexibility Act 

does not require an initial or final 

regulatory flexibility analysis. 5 U.S.C. 

603, 604. 

The Bureau has determined that the 

Rule does not impose any new 

recordkeeping, reporting, or disclosure 

requirements on covered entities or 

members of the public that would be 

collections of information requiring 

OMB approval under the Paperwork 

Reduction Act, 44 U.S.C. 3501, et seq. 

List of Subjects in 12 CFR Part 1073 

Administrative practice and 

procedure, Government employees, 

Hearing and appeal procedures, 

Salaries, Wages. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau adds Part 1073 to 

Chapter X in Title 12 of the Code of 

Federal Regulations to read as follows: 

PART 1073—PROCEDURES FOR 

BUREAU DEBT COLLECTION 

Subpart A—Scope, Purpose, and 

Definitions 

Sec. 

1073.101 Scope. 

1073.102 Purpose. 

1073.103 Definitions. 

Subpart B—Administrative Offset 

1073.201 Applicability and scope. 

1073.202 Collection. 

1073.203 Omission of procedures. 

1073.204 Debtor’s rights. 

1073.205 No requirement for duplicate 

notice. 

1073.206 Interest, penalties, and 

administrative costs. 

1073.207 Termination or suspension of 

collection action. 

1073.208 Refunds. 

1073.209 Requests for offset to other 

Federal agencies. 

1073.210 Requests for offset from other 

Federal agencies. 

Subpart C—Salary Offset 

1073.301 Scope. 

1073.302 Notice requirement where CFPB 

is creditor agency. 

1073.303 Procedures to request a hearing. 

1073.304 Failure to timely submit request 

for a hearing. 

1073.305 Procedures for hearing. 

1073.306 Salary offset process. 

1073.307 Voluntary repayment agreements 

as alternative to salary offset where the 

CFPB is the creditor agency. 

1073.308 Special review of repayment 

agreement or salary offset due to changed 

circumstances. 

1073.309 Interest, penalties, and 

administrative costs. 

1073.310 Refunds. 

1073.311 Non-waiver of rights by payment. 

1073.312 Exception to procedures. 

Subpart D—Administrative Wage 

Garnishment 

1073.401 Administrative wage garnishment. 

Subpart E—Tax Refund Offset 

1073.501 Tax refund offset. 

Authority: 5 U.S.C. 301; 5 U.S.C. 5514; 31 

U.S.C. 3711, et seq. 

Subpart A—Scope, Purpose, and 

Definitions 

§ 1073.101 Scope. 

This part establishes Bureau 

procedures for the collection of certain 

debts owed to the United States. 

(a) This part applies to collections by 

the Bureau from: 

(1) Federal employees who are 

indebted to the Bureau; 

(2) Employees of the Bureau who are 

indebted to other agencies; and 

(3) Other persons, organizations, or 

entities that are indebted to the United 

States, except those excluded in 

paragraph (b) of this section. 

(b) This part does not apply: 

(1) To debts or claims arising under 

the Internal Revenue Code (Title 26, 

U.S. Code), the Social Security Act (42 

U.S.C. 301 et seq.), or the tariff laws of 

the United States; 

(2) To a situation to which the 

Contract Disputes Act (41 U.S.C. 7101 et 

seq.) applies; or 

(3) To debts arising out of acquisition 

contracts subject to the Federal 

Acquisition Regulation. These debts 

shall be determined, collected, 

compromised, terminated, or settled in 

accordance with that regulation (see 48 

CFR part 32). 

(4) In any other case where collection 

of a debt is exclusively provided for or 

prohibited by another statute or 

applicable regulation. 

(c) In addition to the procedures set 

forth in this part, the Bureau shall also 

follow the procedures set forth in 5 CFR 

part 550, subpart K, for the collection by 

offset from indebted government 

employees, and in 31 CFR part 285 and 

the Federal Claims Collection Standards 

(FCCS) (31 CFR chapter IX and parts 

900 through 904) for the collection of 

debts owed to the United States. 

(d) 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 


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U.S.C. 3711 et seq.), the FCCS, or any 

other applicable law. 

§ 1073.102 Purpose. 

The purpose of this part is to 

implement Federal statutes and 

regulatory standards authorizing the 

Bureau to collect debts owed to the 

United States. This part is intended to 

be consistent with the following Federal 

statutes and regulations: 

(1) DCIA at 31 U.S.C. 3711 (collection 

and compromise of claims), section 

3716 (administrative offset), section 

3717 (interest and penalty on claims), 

and section 3718 (contracts for 

collection services); 31 CFR part 285 

(debt collection authorities under the 

DCIA) 

(2) 31 CFR chapter IX and parts 900 

through 904 (FCCS); 

(3) 5 U.S.C. 5514, 5 CFR part 550, 

subpart K (salary offset); 

(4) 5 U.S.C. 5584 (waiver of claims for 

overpayment); 

(5) 31 U.S.C. 3720D, 31 CFR 285.11 

(administrative wage garnishment); and 

(6) 26 U.S.C. 6402(d), 31 U.S.C. 

3720A, and 31 CFR 285.2 (tax refund 

offset). 

§ 1073.103 Definitions. 

Except where the context clearly 

indicates otherwise, the following 

definitions shall apply to this part. 

Administrative offset means 

withholding funds payable by the 

United States to, or held by the United 

States for, a person to satisfy a debt. 

Agency means a department, agency, 

court, court administrative office, or 

instrumentality in the executive, 

judicial, or legislative branch of the 

Federal government, including 

government corporations. 

Bureau or CFPB means the Bureau of 

Consumer Financial Protection. 

Centralized administrative offset 

means an offset initiated by referral to 

the Secretary of the Treasury, or where 

applicable a debt collection center 

designated by the Department of the 

Treasury, by a creditor agency of a past 

due debt for the purpose of collection 

under the Treasury’s centralized offset 

program. 

Certification means a written 

statement transmitted from a creditor 

agency to a paying agency for purposes 

of administrative or salary offset, to the 

Financial Management Service (FMS) 

for offset or to the Secretary of the 

Treasury for centralized administrative 

offset. The certification confirms the 

existence and amount of the debt and 

verifies that the creditor agency has 

afforded the debtor the required 

procedural protections. Where the 

debtor requests a hearing on a claimed 

debt, the decision by a hearing official 

or administrative law judge constitutes 

a certification. 

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 an agency of 

the Federal Government to which the 

debt is owed, or a debt collection center 

when acting on behalf of a creditor 

agency to collect a debt. An agency may 

be both the creditor agency and the 

paying agency. 

Debt or claim means an amount of 

money, funds, or property that has been 

determined by an agency official to be 

due the United States from any person, 

organization, or entity, except another 

Federal entity. For purposes of this part, 

a debt or claim owed to the Bureau 

constitutes a debt or claim owed to the 

United States. 

Debt collection center means the 

Department of the Treasury or other 

government 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 a person who owes a 

debt or a claim. The term ‘‘person’’ 

includes any individual, organization, 

or entity, except another Federal agency. 

Director means the Director of the 

Bureau of Consumer Financial 

Protection or the Director’s designee. 

Disposable pay means that part of 

current adjusted basic pay, special pay, 

incentive pay, retired pay, retainer pay, 

and, in the case of an employee not 

entitled to adjusted basic pay, other 

authorized pay, remaining for each pay 

period after the deduction of any 

amount required by law to be withheld. 

Federal Claims Collection Standards 

(FCCS) means standards published at 31 

CFR Parts 900 through 904. 

Financial Management Service (FMS) 

is a Bureau of the Department of the 

Treasury. 

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. 

Non-centralized administrative offset 

means offsets that an agency conducts, 

at the agency’s discretion, internally or 

in cooperation with the agency 

certifying or authorizing payment to the 

debtor. 

Notice of Intent to Offset or Notice of 

Intent means a written notice from a 

creditor agency to an employee, 

organization, entity, or restitution 

debtor that claims a debt and informs 

the debtor that the creditor agency 

intends to collect the debt by 

administrative or salary offset. The 

notice also informs the debtor of certain 

procedural rights with respect to the 

claimed debt and respective offset 

procedure. 

Paying agency means the agency of 

the Federal Government that withholds 

funds payable to a person who owes a 

debt to an agency of the Federal 

Government. The term ‘‘person’’ 

includes any individual, organization, 

or entity, except another Federal agency. 

An agency may be both the creditor 

agency and the paying agency. 

Recoupment means a special method 

of adjusting debts arising under the 

same transaction or occurrence. 

Salary offset means an administrative 

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

5514 by deduction(s) at one or more 

officially established pay intervals from 

the current pay account of a Federal 

employee without his or her consent. 

Withholding order means any order 

for withholding or garnishment of pay 

issued by an agency, or judicial or 

administrative body. 

Subpart B—Administrative Offset 

§ 1073.201 Applicability and scope. 

(a) Applicability. The provisions of 

this subpart apply to the collection of 

debts owed to the United States arising 

out of the activities of, or referred to, the 

Bureau. This subpart is intended to be 

consistent with the Federal Claims 

Collection Standards (31 CFR chapter IX 

and parts 900 through 904) on 

administrative offset issued by the 

Department of Treasury and the 

Department of Justice. 

(b) Centralized administrative offset. 

(1) The Director will refer any eligible 

debt over 180 days delinquent to the 

Department of the Treasury or a 

designated debt collection center for 

collection by centralized administrative 

offset. The Director may also refer any 

eligible debt less than 180 days 

delinquent to the Department of the 

Treasury for offset. 

(2) At least 60 days prior to referring 

a debt to the Department of the Treasury 

in accordance with paragraph (b)(1) of 

this section, the Director will send 

notice to the debtor in accordance with 

the requirements of § 1073.204 of this 

subpart. 

(c) Non-centralized administrative 

offset. (1) When centralized 

administrative offset is not available or 

appropriate, the Director may collect 

past-due, legally enforceable debts 

through non-centralized administrative 

offset. In these cases, the Director may 


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offset a payment internally or make an 

offset request directly to a paying 

agency. 

(2) At least 30 days prior to offsetting 

a payment internally or requesting a 

paying agency to offset a payment in 

accordance with paragraph (c)(1) of this 

section, the Director will send notice to 

the debtor in accordance with the 

requirements of § 1073.204 of this 

subpart. 

§ 1073.202 Collection. 

(a) The Director may collect a claim 

from a person by administrative offset of 

monies payable by the Government only 

after: 

(1) Providing the debtor with the 

procedures of this subpart; and 

(2) Providing the paying agency with 

written certification that the debtor 

owes the debt in the amount stated and 

that the Bureau, as creditor agency, has 

complied with this part. 

(b) The Director will initiate 

collection by administrative offset of 

only those debts for which that remedy 

is permissible under 31 CFR 901.3(a). 

(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. 

§ 1073.203 Omission of procedures. 

The Bureau shall not be required to 

follow the procedures described in 

§ 1073.204 where: 

(a) The offset is in the nature of a 

recoupment; 

(b) The debt arises under a contract as 

set forth in Cecile Industries, Inc. v. 

Cheney, 995 F.2d 1052 (Fed. Cir. 1993); 

or 

(c) In the case of non-centralized 

administrative offsets, the Bureau first 

learns of the existence of the amount 

owed by the debtor when there is 

insufficient time before payment would 

be made to the debtor/payee to allow for 

prior notice and an opportunity to 

review. When prior notice and an 

opportunity to review are omitted, the 

Director shall give the debtor such 

notice and an opportunity for review as 

soon as practicable and shall promptly 

refund any money ultimately found not 

to be due to the U.S. Government. 

§ 1073.204 Debtor’s rights. 

(a) Debtor’s rights prior to collection 

or referral. Prior to collecting any claim 

by administrative offset or referring 

such claim to another agency for 

collection through administrative offset, 

the Director shall provide the debtor 

with the following: 

(1) A Notice of Intent to Offset, which 

shall include written notice of the type 

and amount of the debt, the intention of 

the Director to use administrative offset 

to collect the debt, and an explanation 

of the debtor’s rights under 31 U.S.C. 

3716; 

(2) An opportunity to inspect and 

copy Bureau records related to the debt, 

unless such records are exempt from 

disclosure; 

(3) An opportunity for review within 

the Bureau of the determination of 

indebtedness; and 

(4) An opportunity to enter into a 

written agreement to repay the debt. 

(b) Opportunity for review. (1) Any 

request by the debtor for such review 

shall be in writing and shall be 

submitted to the Bureau within 30 

calendar days of the date of the Notice 

of Intent to Offset. The Director may 

waive the time limit for requesting 

review for good cause shown by the 

debtor; 

(2) Upon receipt of a request for 

review by the debtor, the Director shall 

provide the debtor with a reasonable 

opportunity for an oral hearing when 

the Director determines that the 

question of the indebtedness cannot be 

resolved by review of the documentary 

evidence alone (e.g., when the 

determination turns on an issue of 

credibility or veracity). Unless 

otherwise required by law, an oral 

hearing under this section is not 

required to be a formal evidentiary 

hearing, although all significant matters 

discussed at the hearing shall be 

documented. 

(3) In cases where an oral hearing is 

not required by this section, the Bureau 

shall make its determination based on a 

documentary hearing consisting of a 

review of the written record. 

§ 1073.205 No requirement for duplicate 

notice. 

Where the Director previously has 

given a debtor any of the required notice 

and review opportunities with respect 

to a particular debt, the Director is not 

required to duplicate such notice and 

review opportunities prior to initiating 

administrative offset. 

§ 1073.206 Interest, penalties, and 

administrative costs. 

(a) Pursuant to 31 U.S.C. 3717, the 

Director shall assess interest, penalties, 

and administrative costs on debts owed 

to the United States. Interest, penalties, 

and administrative costs will be 

assessed in accordance with 31 CFR 

901.9. 

(b) The Director shall waive collection 

of interest on a debt or any portion of 

the debt which is paid in full within 30 

days after the date on which the interest 

began to accrue. 

(c) The Director may waive interest 

accrued during a period a disputed debt 

is under investigation or review by the 

Bureau, i.e., from the date the Bureau 

receives a request for review until the 

date the Bureau issues a final agency 

decision. The Director may only grant 

this waiver for good cause shown by the 

debtor. This waiver must be requested 

by the debtor before the expiration of 

the 30-day waiver period described in 

paragraph (b) of this section. 

(d) The Director may at any time 

waive collection of interest, penalties, or 

administrative costs if he or she finds 

that one or more of the following 

conditions exists: 

(1) The Debtor is unable to pay any 

significant sum toward the debt within 

a reasonable period of time; 

(2) Collection of interest, penalties, or 

administrative costs will jeopardize 

collection of the principal of the debt; 

(3) The Bureau is unable to enforce 

collection in full within a reasonable 

period of time through collection 

proceedings; or 

(4) Collection is against equity and 

good conscience or is not in the best 

interest of the United States. 

(e) The Director is authorized to 

assess interest, penalties, administrative 

costs, or other related charges on debts 

that are not subject to 31 U.S.C. 3717 to 

the extent authorized under the 

common law or other applicable 

statutory authority. 

§ 1073.207 Termination or suspension of 

collection action. 

The Director may suspend or 

terminate collection action on a claim 

not in excess of $100,000, or such other 

amount as the Attorney General may 

direct, exclusive of interest, penalties, 

and administrative costs, after 

deducting the amount of partial 

payments or collections, if any. Any 

such termination or suspension shall be 

conducted in accordance with the 

requirements of 31 U.S.C. 3711 under 

the procedures established in 31 CFR 

part 903. 

§ 1073.208 Refunds. 

Amounts recovered by administrative 

offset but later found not to be owed to 

the Government shall be promptly 

refunded. Unless required by law or 

contract, such refunds shall not bear 

interest. 

§ 1073.209 Request for offset to other 

Federal agencies. 

The Director may request that a debt 

owed to the Bureau be administratively 

offset against funds due and payable to 

a debtor by another Federal agency. In 

requesting administrative offset, the 


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Bureau, as the creditor agency, will 

provide written certification to the 

Federal agency holding funds payable to 

the debtor, stating: 

(a) That the debtor owes the debt; 

(b) The amount and basis of the debt; 

and 

(c) That the Bureau has fully 

complied with the requirements of its 

own administrative offset regulations 

and the applicable provisions of 31 

U.S.C. 3716. 

§ 1073.210 Request for offset from other 

Federal agencies. 

Any Federal agency may request that 

funds due and payable to its debtor by 

the Bureau be administratively offset by 

the Bureau in order to collect a debt 

owed to such agency by the debtor. The 

Director shall initiate the requested 

offset only upon: 

(a) Receipt of written certification 

from the creditor agency stating: 

(1) That the debtor owes the debt; 

(2) The amount and basis of the debt; 

and 

(3) That the creditor agency has fully 

complied with its own administrative 

offset regulations and with the 

applicable provisions of 31 U.S.C. 3716; 

and 

(b) A determination that collection by 

offset against funds payable by the 

Bureau would be in the best interest of 

the United States and that such offset 

would not be contrary to law. 

Subpart C—Salary Offset 

§ 1073.301 Scope. 

(a) These salary offset regulations 

should be read in conjunction with 5 

U.S.C. 5514 and 5 CFR part 550, subpart 

K, and apply to the collection of debts 

owed by employees of the Bureau or 

other Federal agencies. 

(b) These salary offset procedures do 

not apply: 

(1) Where an employee consents to 

the recovery of a debt from his current 

pay account; 

(2) To debts arising under the Internal 

Revenue Code (Title 26, U.S. Code), the 

tariff laws of the United States, or to any 

case where collection of a debt by salary 

offset is explicitly provided for or 

prohibited by another statute. 

(c) These procedures do not preclude 

an employee from requesting a waiver of 

an erroneous payment under 5 U.S.C. 

5584, or from questioning the amount or 

validity of a debt, in the manner 

specified by law or these agency 

regulations. This subpart also does not 

preclude an employee from requesting 

waiver of the collection of a debt under 

any other applicable statutory authority. 

(d) When possible, salary offset 

through centralized administrative 

offset procedures should be attempted 

before seeking salary offset from a 

paying agency different than the 

creditor agency. 

§ 1073.302 Notice requirement where 

CFPB is creditor agency. 

Where the Bureau seeks salary offset 

under 5 U.S.C. 5514 as the creditor 

agency, the Director shall first provide 

the employee with a written Notice of 

Intent to Offset at least 30 calendar days 

before salary offset is to commence. The 

Notice of Intent to Offset shall include 

the following information and 

statements: 

(a) That the Director has determined 

that a debt is owed to the Bureau, and 

the origin, nature, and amount of the 

debt; 

(b) That the Director intends to collect 

the debt by means of deduction from the 

employee’s current disposable pay 

account; 

(c) The frequency and amount of the 

intended deduction, stated as a fixed 

dollar amount or as a percentage of 

disposable pay, not to exceed 15 percent 

of disposable pay; 

(d) That the Director intends to 

continue the deductions until the debt 

is paid in full or otherwise resolved; 

(e) The opportunity (under terms 

agreeable to the Director) to establish a 

schedule for the voluntary repayment of 

the debt or enter into a written 

agreement to establish a schedule for 

repayment of the debt in lieu of offset. 

The agreement must be in writing, 

signed by both the employee and the 

Director, and documented in the 

Bureau’s files; 

(f) The Bureau’s policy concerning 

interest, penalties, and administrative 

costs, including a statement that such 

assessments must be made unless 

excused in accordance with the FCCS or 

these regulations; 

(g) That the employee has the right to 

inspect and copy Bureau records not 

exempt from disclosure that relate to the 

debt or, if the employee or his or her 

representative cannot personally inspect 

the records, to request and receive a 

copy of such records; 

(1) Such requests must be made in 

writing, and identify by name and 

address the designated individual to 

whom the request should be sent. 

(2) Upon receipt of such a request, the 

designated official shall notify the 

employee of the time and location 

where the records may be inspected and 

copied; 

(h) That the employee has a right to 

a hearing regarding the existence and 

amount of the debt claimed or the salary 

offset schedule proposed by the 

Director, provided that the employee 

files a request for such a hearing with 

the Bureau in accordance with 

§ 1073.303. Such a hearing will be 

conducted by an impartial official who 

is an administrative law judge or who is 

an other hearing official not under the 

supervision or control of the Director; 

(i) The procedure and deadline for 

requesting a hearing, including the 

name, address, and telephone number of 

the designated individual to whom a 

request for hearing must be sent; 

(j) That a request for hearing must be 

received by the Bureau within 15 

calendar days following receipt of the 

Notice of Intent, and that filing of a 

request for hearing will stay the 

commencement of collection 

proceedings; 

(k) That the Director will initiate 

salary offset procedures not less than 30 

days from the date of the employee’s 

receipt of the Notice of Intent to Offset, 

unless the employee files a timely 

request for a hearing; 

(l) That if a hearing is held, the 

administrative law judge or other 

hearing official will issue a decision on 

the hearing at the earliest practical date, 

but not later than 60 days after the filing 

of the request for the hearing, unless the 

employee requests and the hearing 

official grants a delay in the 

proceedings; 

(m) That any knowingly false or 

frivolous statements, representations, or 

evidence may subject the employee to: 

(1) Disciplinary procedures 

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

5 CFR part 752, or any other applicable 

statutes or regulations; 

(2) Penalties under the False Claims 

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

under any other applicable statutory 

authority; or 

(3) Criminal penalties under 18 U.S.C. 

286, 287, 1001, and 1002 or under any 

other applicable statutory authority; 

(n) 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 under statutes or regulations 

governing the program for which the 

collection is being made; and 

(o) That amounts paid on or deducted 

from the debt which are later waived or 

found not to be owed to the United 

States will be promptly refunded to the 

employee, unless there are applicable 

contractual or statutory provisions to 

the contrary. 

§ 1073.303 Procedures to request a 

hearing. 

(a) To request a hearing, an employee 

must send a written request to the 

designated official indicated in the 

Notice of Intent stating why the 


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41682 Federal Register / Vol. 78, No. 133 / Thursday, July 11, 2013 / Rules and Regulations 

employee believes the determination 

concerning the existence or amount of 

debt is in error. The request must be 

received by the Bureau within 15 

calendar days following the employee’s 

receipt of the Notice of Intent. 

(b) The request must be signed by the 

employee and fully identify and explain 

with reasonable specificity all the facts, 

evidence, and witnesses, if any, which 

the employee believes support his or her 

position. The request for hearing must 

state whether the employee is 

requesting an oral or documentary 

hearing. If an oral hearing is requested, 

the request shall explain why the matter 

cannot be resolved by a review of 

documentary evidence alone. 

§ 1073.304 Failure to timely submit request 

for a hearing. 

If the Bureau does not receive an 

employee’s request for hearing within 

the 15-day period set forth in 

§ 1073.303, the employee shall not be 

entitled to a hearing, and salary offset 

may be initiated. However, the Bureau 

may accept an untimely request for 

hearing if the employee can show that 

the delay was because of circumstances 

beyond his or her control or because of 

failure to receive notice of the time limit 

(unless otherwise aware of it). 

§ 1073.305 Procedures for hearing. 

(a) Obtaining the services of a hearing 

official. The Director must obtain the 

services of an impartial hearing official 

who is an administrative law judge or 

who is an other official not under the 

supervision or control of the Director. 

The Director shall designate an 

administrative law judge or contact an 

agent of another agency designated in 

appendix A to 5 CFR part 581 to arrange 

for a hearing official. 

(b) Notice and format of hearing—(1) 

Notice. The hearing official shall 

determine whether the hearing shall be 

oral or documentary and shall notify the 

employee of the form of the hearing. If 

the hearing will be oral, the notice shall 

set forth the date, time, and location of 

the hearing, which must be held within 

30 calendar days after the request is 

received, unless the employee requests 

that the hearing be delayed. If the 

hearing will be documentary, the 

employee shall be notified to submit 

evidence and written arguments in 

support of his or her case to the hearing 

official within 30 calendar days. 

(2) Oral hearing. The hearing official 

may grant a request for an oral hearing 

if he or she determines that the issues 

raised by the employee cannot be 

resolved by review of documentary 

evidence alone (e.g., where credibility 

or veracity is at issue). Witnesses who 

testify in oral hearings shall do so under 

written or recorded oath or affirmation. 

An oral hearing is not required to be a 

formal evidentiary hearing. Oral 

hearings may take the form of, but are 

not limited to: 

(i) Informal conferences with the 

hearing official in which the employee 

and Bureau representative are given full 

opportunity to present evidence, 

witnesses, and argument; 

(ii) Informal meetings in which the 

hearing official interviews the 

employee; or 

(iii) Formal written submissions with 

an opportunity for oral presentation. 

(3) Documentary hearing. If the 

hearing official determines that an oral 

hearing is not necessary, he or she will 

make the determination based upon a 

review of the available written record, 

including any documentation submitted 

by the employee in support of his or her 

position. 

(4) Record. The hearing official shall 

maintain a summary record of any 

hearing conducted under this section. 

(c) Rescheduling of the hearing date. 

The hearing official shall reschedule a 

hearing if requested to do so by both 

parties, who shall be given reasonable 

notice of the time and place of this new 

hearing. 

(d) Failure to appear or submit 

documentary evidence. In the absence of 

good cause shown, an employee who 

fails to appear at an oral hearing, or fails 

to submit documentary evidence for a 

documentary hearing, will have waived 

the right to a hearing. Furthermore, the 

employee will have been deemed to 

admit the existence and amount of the 

debt as described in the Notice of Intent. 

If the representative of the creditor 

agency fails to appear without good 

cause shown, the hearing official shall 

proceed with the hearing as scheduled, 

and issue a decision based upon the oral 

testimony presented and the 

documentation submitted by both 

parties. 

(e) Date of decision. The hearing 

official shall issue a written decision 

based upon the evidence and 

information developed at the hearing, as 

soon as practicable after the hearing, but 

not later than 60 calendar days after the 

date on which the request for hearing 

was received by the Bureau, unless the 

hearing was delayed at the request of 

the employee. In the event of such a 

delay, the 60-day decision period shall 

be extended by the number of days by 

which the hearing was postponed. The 

decision of the hearing official shall be 

final. 

(f) Content of decision. The written 

decision shall include: 

(1) The facts purported to evidence 

the nature and origin of the proposed 

debt; 

(2) The hearing official’s analysis, 

findings and conclusions, in light of the 

hearing, as to the employee’s and/or 

Bureau’s grounds, the amount and 

validity of the alleged debt and, where 

applicable, the repayment schedule. 

§ 1073.306 Salary offset process. 

(a) Method and source of deductions. 

Salary offsets under this subpart shall be 

deducted from current disposable pay, 

except as provided in paragraph (e) of 

this section. 

(b) Determination of disposable pay. 

The Bureau’s Office of the Chief 

Financial Officer will consult with the 

Bureau’s Office of Human Capital to 

determine the amount of a Bureau 

employee’s disposable pay and will 

implement the salary offset. If the debtor 

is not employed by the Bureau, the 

agency employing the debtor will 

determine the amount of the employee’s 

disposable pay and will implement the 

salary offset. 

(c) When salary offset may begin. 

Deductions shall begin within three 

official pay periods following, as 

applicable, the initiation of salary offset 

without a hearing under § 1073.304, the 

decision of the hearing official under 

§ 1073.305, or receipt of the creditor 

agency’s request for offset where the 

Bureau is not the creditor agency. 

(d) Amount of salary offset. The 

amount to be offset from each salary 

payment will be up to 15 percent of a 

debtor’s disposable pay, as follows: 

(1) If the amount of the debt is equal 

to or less than 15 percent of the 

disposable pay, such debt generally will 

be collected in one lump sum payment; 

(2) If the employee is financially 

unable to pay in one lump sum or the 

amount of the debt exceeds 15 percent 

of disposable pay for an officially 

established pay interval, collection will 

be made in installments. Installment 

deductions will be made over a period 

of no greater than the anticipated period 

of employment, except as provided in 

paragraph (e) of this section. Installment 

deductions must ordinarily bear a 

reasonable relationship to the size of the 

debt and the employee’s ability to pay. 

An installment deduction 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 creditor agency may 

determine that smaller deductions are 

appropriate based on the employee’s 

ability to pay. 

(e) Final salary or other payment. 

After the employee has separated either 


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Federal Register / Vol. 78, No. 133 / Thursday, July 11, 2013 / Rules and Regulations 41683 

voluntarily or involuntarily from the 

payment agency, the payment agency 

may, pursuant to 31 U.S.C. 3716, make 

a lump sum deduction exceeding 15 

percent of disposable pay from any final 

salary or other payments in order to 

satisfy a debt. If the debt cannot be 

liquidated by offset from any final 

payment due the former employee as of 

the date of separation, it may be offset 

under 31 U.S.C. 3716 from later 

payments of any kind due the former 

employee from the United States, unless 

prohibited by law. 

§ 1073.307 Voluntary repayment 

agreements as alternative to salary offset 

where the CFPB is the creditor agency. 

(a) In response to a Notice of Intent, 

an employee may propose to voluntarily 

repay the debt through scheduled 

voluntary payments, in lieu of salary 

offset. An employee who wishes to 

repay a debt in this manner shall submit 

to the Bureau a written agreement 

proposing a repayment schedule. This 

proposal must be received by the 

Bureau within 30 calendar days 

following the date of the Notice of 

Intent. 

(b) The Director shall notify the 

employee whether the employee’s 

proposed voluntary repayment 

agreement is acceptable. It is within the 

discretion of the Director whether to 

accept or reject the debtor’s proposal, or 

whether to propose to the debtor a 

modification of the proposed repayment 

agreement: 

(1) If the Director decides that the 

proposed repayment agreement is 

unacceptable, he or she shall notify the 

employee and 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 on the 

proposed repayment agreement, as 

provided in § 1073.303; or 

(2) If the Director decides that the 

proposed repayment agreement is 

acceptable or the debtor agrees to a 

modification proposed by the Director, 

the agreement shall be put in writing 

and signed by both the employee and 

the Director. 

§ 1073.308 Special review of repayment 

agreement or salary offset due to changed 

circumstances. 

(a) An employee subject to a 

voluntary repayment agreement or 

salary offset payable to the Bureau as 

creditor agency may request a special 

review by the Director 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. A request for special 

review may be made at any time. 

(b) In support of a request for special 

review, the employee shall submit to the 

Bureau a detailed statement and 

supporting documents for the employee, 

his or her spouse, and dependents 

indicating: 

(1) Income from all sources; 

(2) Assets; 

(3) Liabilities; 

(4) Number of dependents; 

(5) Monthly expenses for food, 

housing, clothing, and transportation; 

(6) Medical expenses; and 

(7) Exceptional expenses, if any. 

(c) The employee shall also file an 

alternative proposed offset or payment 

schedule and a statement, with 

supporting documents, showing why 

the current salary offset or payments 

result in extreme financial hardship to 

the employee. 

(d) The Director shall evaluate the 

statement and supporting documents 

and determine whether the original 

salary 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. The Director shall 

notify the employee in writing within 

30 calendar days of his or her 

determination. 

(e) If the special review results in a 

revised salary offset or repayment 

schedule, the Director shall provide a 

new certification to the paying agency. 

§ 1073.309 Interest, penalties, and 

administrative costs. 

Where the Bureau is the creditor 

agency, it shall assess interest, penalties, 

and administrative costs pursuant to the 

procedures set forth in § 1073.206 and 

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

31 CFR parts 900 through 904. 

§ 1073.310 Refunds. 

(a) Where the Bureau is the creditor 

agency, it shall promptly refund any 

amount deducted under the authority of 

5 U.S.C. 5514 when the debt is waived 

or otherwise found not to be owing to 

the United States (unless expressly 

prohibited by statute or regulation), or 

when an administrative or judicial order 

directs the Bureau to refund amounts 

deducted from the employee’s current 

pay. 

(b) Unless required by law or contract, 

such refunds shall not bear interest. 

§ 1073.311 Non-waiver of rights by 

payment. 

An employee’s involuntary payment 

of all or any portion of a debt being 

collected under 5 U.S.C. 5514 shall not 

be construed as a waiver of any rights 

which the employee may have under 5 

U.S.C. 5514 or any other provision of 

contract or law, unless there are 

statutory or contractual provisions to 

the contrary. 

§ 1073.312 Exception to procedures. 

(a) The procedures set forth in this 

subpart shall not apply to the following: 

(1) Any adjustment to pay arising out 

of an employee’s election of coverage or 

a change in coverage under a Federal 

benefits program requiring periodic 

deductions from pay, if the amount to 

be recovered was accumulated over four 

pay periods or less; 

(2) A routine intra-agency adjustment 

of pay that is made to correct an 

overpayment attributable to clerical or 

administrative errors or delays in 

processing pay documents, if the 

overpayment occurred within the four 

pay periods preceding the adjustment 

and, at the time of such adjustment, or 

as soon thereafter as practical, the 

individual is provided written notice of 

the nature and amount of the 

adjustment and a point of contact for 

contesting such adjustment; or 

(3) Any adjustment to collect a debt 

amounting to $50 or less, if, at the time 

of such adjustment, or as soon thereafter 

as practical, the individual is provided 

written notice of the nature and amount 

of the adjustment and a point of contact 

for contesting such adjustment. 

(b) In the event of a negative 

adjustment to pay, as described in 

subsection (a)(1), the Bureau will 

provide a clear and concise statement in 

the employee’s earnings statement 

advising the employee of the previous 

overpayment at the time the adjustment 

is made. 

Subpart D—Administrative Wage 

Garnishment 

§ 1073.401 Administrative wage 

garnishment. 

The Director may collect debts from a 

debtor’s wages by means of 

administrative wage garnishment in 

accordance with the requirements of 31 

U.S.C. 3720D under the procedures 

established in 31 CFR 285.11. 

Subpart E—Tax Refund Offset 

§ 1073.501 Tax refund offset. 

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

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

Secretary of the Treasury to offset a debt 

owed to the United States Government 

from the tax refund due a taxpayer. The 

Director may administer tax refund 

offsets in accordance with the 

requirements of 31 U.S.C. 3720A under 

the procedures established in 31 CFR 

285.2. 


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41684 Federal Register / Vol. 78, No. 133 / Thursday, July 11, 2013 / Rules and Regulations 

Dated: July 1, 2013. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–16470 Filed 7–10–13; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 25 

[Docket No. FAA–2012–0260; Special 

Conditions No. 25–494–SC] 

Special Conditions: Embraer S.A. 

Model EMB–550 Airplanes, Sudden 

Engine Stoppage 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final special conditions. 

SUMMARY: These special conditions are 

issued for the Embraer Model EMB–550 

airplane. This airplane has novel or 

unusual design features as compared to 

the state of technology envisioned in the 

airworthiness standards for transportcategory airplanes. These design 

features include engine size and the 

potential torque loads imposed by 

sudden engine stoppage. The applicable 

airworthiness regulations do not contain 

adequate or appropriate safety standards 

for this design feature. These special 

conditions contain the additional safety 

standards that the Administrator 

considers necessary to establish a level 

of safety equivalent to that established 

by the existing airworthiness standards. 

DATES: Effective Date: August 12, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Cindy Ashforth, FAA, International 

Branch, ANM–116, Transport Airplane 

Directorate, Aircraft Certification 

Service, 1601 Lind Avenue SW., 

Renton, Washington 98057–3356; 

telephone (425) 227–2768; facsimile 

(425) 227–1320. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 14, 2009, Embraer applied for 

a type certificate for their new Model 

EMB–550 airplane. The Model EMB– 

550 airplane is the first of a new family 

of jets designed as a corporate jet, and 

for fractional, charter, and privateowner operations. The airplane is a 

conventional configuration with a low 

wing and T-tail empennage. The 

primary structure is metal with 

composite empennage and control 

surfaces. The Model EMB–550 airplane 

is designed for eight passengers, with a 

maximum of 12 passengers (including 

toilet seat). It is equipped with two 

Honeywell HTF7500–E medium-bypassratio turbofan jet engines mounted on 

aft-fuselage pylons. Each engine 

produces approximately 6,540 lb of 

thrust for normal takeoff. The primary 

flight-control systems are electronically 

controlled using fly-by-wire (FBW) 

technology. 

The Model EMB–550 airplane 

incorporates novel or unusual design 

features involving engine size and 

torque load that affect the airframe as it 

relates to sudden engine-stoppage 

conditions. 

Type Certification Basis 

Under the provisions of Title 14, Code 

of Federal Regulations (14 CFR) 21.17, 

Embraer must show that the Model 

EMB–550 airplane meets the applicable 

provisions of part 25, as amended by 

Amendments 25–1 through 1–127. 

If the Administrator finds that the 

applicable airworthiness regulations 

(i.e., 14 CFR part 25) do not contain 

adequate or appropriate safety standards 

for the Model EMB–550 airplane 

because of a novel or unusual design 

feature, special conditions are 

prescribed under the provisions of 

§ 21.16. 

Special conditions are initially 

applicable to the model for which they 

are issued. Should the type certificate 

for that model be amended later to 

include any other model that 

incorporates the same novel or unusual 

design feature, the special conditions 

would also apply to the other model. 

In addition to the applicable 

airworthiness regulations and special 

conditions, the Model EMB–550 

airplane must comply with the fuel-vent 

and exhaust-emission requirements of 

14 CFR part 34 and the noisecertification requirements of 14 CFR 

part 36; and the FAA must issue a 

finding of regulatory adequacy under 

§ 611 of Public Law 92–574, the ‘‘Noise 

Control Act of 1972.’’ 

The FAA issues special conditions, as 

defined in 14 CFR 11.19, in accordance 

with § 11.38, and they become part of 

the type-certification basis under 

§ 21.17(a)(2). 

Novel or Unusual Design Features 

The Model EMB–550 airplane 

incorporates a novel or unusual design: 

The Embraer Model EMB–550 

airplane will incorporate a mediumbypass-ratio turbofan jet engine that will 

neither seize nor produce transient 

torque loads in the same manner that is 

envisioned by current § 25.361(b)(1) 

regarding ‘‘load that affect sudden 

engine stoppage’’ conditions. 

Discussion of Comments 

Notice of Proposed Special 

Conditions No. 25–12–05–SC, for the 

Embraer Model EMB–550 airplane, was 

published in the Federal Register on 

September 25, 2012 (77 FR 58970). No 

comments were received, and the 

special conditions are adopted as 

proposed. 

Discussion 

The size, configuration, and failure 

modes of jet engines have changed 

considerably from those envisioned by 

14 CFR 25.361(b), when the engineseizure requirement was first adopted. 

Engines have become larger and are now 

designed with large bypass fans capable 

of producing much larger and more 

complex dynamic loads. Relative to the 

engine configurations that existed when 

the rule was developed in 1957, the 

present generation of engines is 

sufficiently different and novel to justify 

issuance of a special condition to 

establish appropriate design standards 

for the Embraer Model EMB–550 

airplane type design. 

Consideration of the limit engine 

torque load imposed by sudden engine 

stoppage due to malfunction or 

structural failure (such as compressor 

jamming) has been a specific 

requirement for transport-category 

airplanes since 1957. In the past, the 

design torque loads associated with 

typical failure scenarios have been 

estimated by the engine manufacturer 

and were provided to the airframe 

manufacturer as limit loads. These limit 

loads were considered simple and pure 

torque static loads. 

It is evident from service history that 

the engine-failure events that tend to 

cause the most severe loads are fanblade failures, which occur much less 

frequently than the typical ‘‘limit’’ load 

condition. 

The regulatory authorities and 

industry have developed a standardized 

requirement in the Aviation Rulemaking 

Advisory Committee (ARAC) forum. 

The technical aspects of this 

requirement have been agreed upon and 

have been accepted by the ARAC Loads 

and Dynamics Harmonization Working 

Group, and incorporated in EASA CS– 

25. The proposed special conditions 

outlined below reflect the ARAC 

recommendation and CS–25. In 

addition, the ARAC recommendation 

includes corresponding advisory 

material that is considered an 

acceptable means of compliance to the 

proposed special conditions outlined 

below. 

To maintain the level of safety 

envisioned in § 25.361(b), more 


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