[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Rules and Regulations]
[Pages 68416-68418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28045]


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FEDERAL TRADE COMMISSION

16 CFR Part 1


Administrative Wage Garnishment

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: This final rule establishes debt collection regulations for 
the Federal Trade Commission (``FTC'' or ``Commission'' or ``agency'') 
to conform to the Debt Collection Act of 1982, as amended by the Debt 
Collection Improvement Act of 1996, the Federal Claims Collection 
Standards, and other laws applicable to the collection of nontax debts 
owed to the FTC.

DATES: This final rule is effective December 8, 2010.

FOR FURTHER INFORMATION CONTACT: Ami Joy Rop, Attorney, Division of 
Planning and Information, at <a href="/cdn-cgi/l/email-protection#1475667b64547260773a737b62"><span class="__cf_email__" data-cfemail="e9889b8699a98f9d8ac78e869f">[email protected]</span></a>; telephone number 202-326-
2648 (Note: this is not a toll-free call); or write to: Federal Trade 
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    This final rule implements the FTC's debt collection regulations to 
conform to the Debt Collection Act of 1982, Public Law 97-365, 96 Stat. 
1749 (Oct. 25, 1982), as amended by the Debt Collection Improvement Act 
of 1996 (DCIA), Public Law 104-134, 110 Stat. 1321, 1358 (Apr. 26, 
1996), the Federal Claims Collection Standards, 31 CFR parts 900 
through 904, Debt Collection Authorities Under the Debt Collection 
Improvement Act of 1996, 31 CFR part

[[Page 68417]]

285, and other laws applicable to the collection of nontax debt owed to 
the Government.
    Section 31001(o) of the DCIA (codified at 31 U.S.C. 3720D) 
authorizes collection of Federal agency debt by administrative wage 
garnishment. Wage garnishment is a process whereby an employer 
withholds amounts from an employee's wages and pays those amounts to 
the employee's creditor in satisfaction of a withholding order. The 
DCIA authorizes Federal agencies to garnish no more than 15% of the 
disposable pay of a debtor to satisfy delinquent nontax debt owed to 
the United States. Prior to the enactment of the DCIA, agencies were 
required to obtain a court judgment before garnishing the wages of non-
Federal employees.
    The DCIA directed the Secretary of the Treasury to issue 
implementing regulations (see 31 U.S.C. 3720D(h)) with respect to 
administrative wage garnishment. On May 6, 1998 (63 FR 25136), the 
Department of the Treasury published a final rule implementing the 
statutory administrative wage garnishment requirements at 31 CFR 
285.11. Paragraph (f) of 31 CFR 285.11 provides that ``[a]gencies shall 
prescribe regulations for the conduct of administrative wage 
garnishment hearings consistent with this section or shall adopt this 
section without change by reference.'' Under the DCIA, the Treasury 
Department serves as a coordinator for Federal debt collection through 
its Treasury Offset Program.
    This final rule would amend the FTC's regulations at 16 CFR Part 1, 
Subpart N, to adopt 31 CFR 285.11 in its entirety. Specifically, the 
final rule would establish a new provision that would contain a cross-
reference to 31 CFR 285.11.

II. Overview of the Administrative Wage Garnishment Process

    Readers should refer to the Department of the Treasury regulation 
at 31 CFR 285.11 for details regarding the administrative wage 
garnishment procedures that would be adopted by this final rule. For 
the convenience of readers, the following presents an overview of the 
rules and procedures codified at 31 CFR 285.11.

1. Notice to Debtor

    At least 30 days before the agency initiates garnishment 
proceedings, the agency will give the debtor written notice informing 
him or her of the nature and amount of the debt, the intention of the 
agency to collect the debt through deductions from pay, and an 
explanation of the debtor's rights regarding the proposed action.

2. Rights of Debtor

    The agency will provide the debtor with an opportunity to inspect 
and copy records related to the debt, to establish a repayment 
agreement, and to receive a hearing concerning the existence or amount 
of the debt and the terms of a repayment schedule. A hearing, which may 
be in writing, by telephone, or in person, must be held prior to the 
issuance of a withholding order if the debtor's request is timely 
received. For hearing requests that are not received in the specified 
time frame, the agency need not delay the issuance of a withholding 
order prior to conducting a hearing. An agency may not garnish the 
wages of a debtor who has been involuntarily separated from employment 
until that individual has been re-employed continuously for at least 12 
months. The debtor bears the responsibility of notifying the agency of 
the circumstances surrounding an involuntary separation from 
employment.

3. Hearing Official

    The Department of the Treasury regulations authorize the head of 
each agency to designate any qualified individual as a hearing 
official. This final rule would provide that any hearing required to 
establish the FTC's right to collect a debt through administrative wage 
garnishment will be conducted by a qualified individual selected by the 
Chairman of the Commission. The hearing official is required to issue a 
written decision no later than 60 days after the request for a hearing 
is made. The hearing official's decision is the final agency action for 
purposes of judicial review.

4. Employer's Responsibilities

    The Treasury Department will send to the employer of a delinquent 
debtor a wage garnishment order directing that the employer pay a 
portion of the debtor's wages to the Federal Government. The employer 
is required to certify certain payment information about the debtor. 
Employers are not required to vary their normal pay cycles in order to 
comply with these requirements. Employers are prohibited from taking 
disciplinary actions against the debtor because the debtor's wages are 
subject to administrative garnishment. An agency may sue an employer 
for amounts not properly withheld from the wages payable to the debtor.

5. Garnishment Amounts

    As provided in the DCIA, up to 15% of the debtor's disposable pay 
for each pay period may be garnished. Special rules apply to 
calculating the amount to be withheld from a debtor's pay that is 
subject to multiple withholding orders. A debtor may request a review 
by the agency of the amount being garnished under a wage garnishment 
order based on materially changed circumstances--such as disability, 
divorce, or catastrophic illness--which result in financial hardship.

III. Procedural Requirements

A. Administrative Procedure Act

    The FTC has determined that implementation of this rule without 
prior notice and the opportunity for public comment is warranted 
because this rule is one of agency procedure and practice and therefore 
is exempt from notice and comment rulemaking requirements under the 
Administrative Procedure Act (APA) at 5 U.S.C. 553(b)(A) and (B).
    This final rule parallels the existing operational regulations of 
other agencies to effectuate the collection of non-tariff and nontax 
debts to implement 31 U.S.C. 3711. Because this rule parallels 
existing, long-standing rules that have already been subject to APA 
notice and comment procedures, we believe that publishing this rule 
with the usual notice and comment procedures is unnecessary. 
Accordingly, the FTC has determined that prior notice and public 
comment procedures would be unnecessary pursuant to 5 U.S.C. 553(b)(B).

B. Regulatory Flexibility Act

    Because the Commission has determined that it may issue these rules 
without public comment, the Commission is also not required to publish 
any initial or final regulatory flexibility analysis under the 
Regulatory Flexibility Act as part of such action. See 5 U.S.C. 603(a), 
604(b).

C. Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3506; 5 CFR part 1320 Appendix A), the Commission has reviewed the 
final rules. The rules contain no collections of information pursuant 
to the Paperwork Reduction Act.

List of Subjects in 16 CFR Part 1

    Administrative practice and procedure, Claims, Debts, Garnishment 
of wages, Hearing and appeal procedures, Pay administration, Salaries, 
Wages.

[[Page 68418]]

Authority and Issuance

0
For the reasons set forth above, the Federal Trade Commission amends 16 
CFR part 1 as follows:
0
1. Amend part 1 by adding a new subpart N (consisting of Sec.  1.100) 
to read as follows:

Subpart N--Administrative Wage Garnishment

Sec
1.100 Administrative wage garnishment.

    Authority: 15 U.S.C. 46; 31 U.S.C. 3720D; 31 CFR 285.11(f).


Sec.  1.100  Administrative wage garnishment.

    (a) General. The Commission may use administrative wage garnishment 
for debts, including those referred to Financial Management Service, 
Department of Treasury, for cross-servicing. Regulations in 31 CFR 
285.11 govern the collection of delinquent nontax debts owed to federal 
agencies through administrative garnishment of non-Federal wages. 
Whenever the Financial Management Service collects such a debt for the 
Commission using administrative wage garnishment, the statutory 
administrative requirements in 31 CFR 285.11 will govern.
    (b) Hearing official. Any hearing required to establish the 
Commission's right to collect a debt through administrative wage 
garnishment shall be conducted by a qualified individual selected at 
the discretion of the Chairman of the Commission, as specified in 31 
CFR 285.11.

    By direction of the Commission.
Richard C. Donohue,
Acting Secretary.
[FR Doc. 2010-28045 Filed 11-5-10; 8:45 am]
BILLING CODE 6750-01-P


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