II 

111TH CONGRESS 

1ST SESSION S. 1042 

To prohibit the use of funds to promote the direct deposit of Veterans 

and Social Security benefits until adequate safeguards are established 

to prevent the attachment and garnishment of such benefits. 

IN THE SENATE OF THE UNITED STATES 

MAY 14, 2009 

Mr. KOHL (for himself and Mrs. MCCASKILL) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To prohibit the use of funds to promote the direct deposit 

of Veterans and Social Security benefits until adequate 

safeguards are established to prevent the attachment and 

garnishment of such benefits. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Illegal Garnishment 

5 Prevention Act’’. 


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1 SEC. 2. PROHIBITION ON USE OF FUNDS TO PROMOTE DI2 RECT DEPOSIT OF VETERANS AND SOCIAL 

3 SECURITY BENEFITS UNTIL ASSURANCE OF 

4 PROTECTION FROM ATTACHMENT OR GAR5 NISHMENT. 

6 (a) FINDINGS.—Congress makes the following find7 ings: 

8 (1) Section 5301(a)(1) of title 38 of the United 

9 States Code provides that Veterans benefit payments 

10 ‘‘shall be exempt from the claim of creditors, and 

11 shall not be liable to attachment, levy, or seizure by 

12 or under any legal or equitable process whatever, ei13 ther before or after receipt by the beneficiary.’’. 

14 (2) Section 207 of the Social Security Act (42 

15 U.S.C. 407) provides that Social Security benefits 

16 shall not ‘‘be subject to execution, levy, attachment, 

17 garnishment, or other legal process, or to the oper18 ation of any bankruptcy or insolvency law.’’. 

19 (3) Congress intended for Veterans and Social 

20 Security benefits to provide at least a minimum sub21 sistence for our nation’s veterans, elderly, and dis22 abled. 

23 (4) Social Security benefits are the only source 

24 of income for over 20 percent of Social Security re25 cipients. 


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1 (5) Many financial institutions are garnishing 

2 accounts on behalf of creditors in order to recover 

3 debt owed to them, and are assessing fees on bank 

4 accounts into which Veterans and Social Security 

5 benefits are electronically deposited. 

6 (6) Many recipients of these benefits are left 

7 temporarily destitute when financial institutions 

8 freeze access to their only source of income. 

9 (7) Despite the lack of protections for direct de10 posit recipients of Veterans and Social Security ben11 efits, the Treasury is spending millions of dollars en12 couraging veterans, seniors, and other recipients of 

13 social security benefits to use direct deposit for re14 ceipt of their benefits. 

15 (b) PROHIBITION.—No funds appropriated or other16 wise made available to the Secretary of the Treasury, the 

17 Secretary of Veterans Affairs, or the Commissioner of So18 cial Security for fiscal year 2010 or any fiscal year there19 after may be used to promote or otherwise encourage re20 cipients of old-age, survivors, or disability insurance bene21 fits paid under title II of the Social Security Act, or vet22 erans benefits provided under the laws administered by 

23 the Secretary of Veterans Affairs, to use direct deposit 

24 for payment of such benefits, or to otherwise promote the 

25 use of direct deposit for such benefits, until the Secretary 


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1 of the Treasury promulgates rules establishing procedures 

2 to ensure that such benefits are protected from attach3 ment and garnishment in accordance with the require4 ments of section 207 of the Social Security Act (42 U.S.C. 

5 407), and at least 5 of the 7 members of the advisory 

6 committee established under subsection (c) concur in ad7 vising the Secretary of the Treasury that such procedures 

8 provide adequate safeguards. 

9 (c) ADVISORY COMMITTEE.— 

10 (1) ESTABLISHMENT.—There is hereby estab11 lished an Advisory Committee to be known as the 

12 ‘‘Social Security Benefits Protection from Attach13 ment or Garnishment Advisory Committee’’. 

14 (2) MEMBERSHIP.—The Committee shall be 

15 comprised of 7 members comprised of, or appointed 

16 by the following: 

17 (A) The Secretary of the Treasury. 

18 (B) The Chair of the Committee on Ways 

19 and Means of the House of Representatives. 

20 (C) The Ranking Member of the Com21 mittee on Ways and Means of the House of 

22 Representatives. 

23 (D) The Chair of the Committee on Fi24 nance of the Senate. 


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1 (E) The Ranking Member of the Com2 mittee on Finance of the Senate. 

3 (F) The Chair of the Special Committee on 

4 Aging of the Senate. 

5 (G) The Ranking Member of the Special 

6 Committee on Aging of the Senate. 

7 (3) MEETINGS.—The Secretary of the Treasury 

8 shall establish meetings of the Committee. 

9 (4) DUTIES.—The Committee shall review the 

10 procedures promulgated by the Secretary of the 

11 Treasury to carry out subsection (b) and, upon the 

12 concurrence of at least 5 members of the Committee, 

13 advise the Secretary of the Treasury as to the ade14 quacy of such procedures with respect to protecting 

15 old-age, survivors, or disability insurance benefits 

16 paid under title II of the Social Security Act from 

17 attachment and garnishment. 

18 (5) FACA EXEMPTION.—The Committee shall 

19 not be subject to the Federal Advisory Committee 

20 Act (5 U.S.C. App.). 

Æ 


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