Source: https://www.federalregister.gov/documents/2019/04/16/2019-07537/collection-of-administrative-debts-collection-of-debts-arising-from-enforcement-and-other-regulatory
Timestamp: 2019-04-23 02:01:09
Document Index: 51137255

Matched Legal Cases: ['arts 900', 'art 285', 'art 267', 'art 550', 'art 285', 'art 267']

Federal Register :: Collection of Administrative Debts; Collection of Debts Arising From Enforcement and Other Regulatory Activity
A Rule by the Federal Reserve System on 04/16/2019
The rule is effective April 16, 2019.
15502-15505 (4 pages)
Docket No. R-1657
RIN 7100 AF-44
Review by the Office of Personnel Management
https://www.federalregister.gov/d/2019-07537 https://www.federalregister.gov/d/2019-07537
Start Preamble Start Printed Page 15502
Yonatan Gelblum, Senior Counsel (202) 452-2046, Legal Division, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. For users of Telecommunication Device for Deaf (TDD) contact (202) 263-4869.
The Board is promulgating new regulations to implement the Debt Collection Improvement Act of 1996 (“DCIA”), Public Law 104-134, 110 Stat. 1321-358. The DCIA generally governs the federal government's debt collection activities. Although the DCIA does not apply directly to the Board, these regulations are adopted pursuant to the Board's authority under Section 10(4) and 11 of the Federal Reserve Act, 12 U.S.C. 244, 248(i), to adopt rules and regulations governing its operations. The Board is adopting these regulations in order to improve the effectiveness of its debt collection efforts, primarily by allowing it to refer debts for collection to the U.S. Department of the Treasury (“Treasury”). In accordance with the DCIA, Treasury and the U.S. Department of Justice jointly promulgated Federal Claims Collection Standards (“FCCS”), 31 CFR parts 900-904. Agencies may adopt the FCCS without change, or may prescribe agency regulations for collecting debts by administrative offset that are consistent with the FCCS. 31 U.S.C. 3716. The U.S. Department of the Treasury has issued additional regulations applicable to collection under the DCIA at 31 CFR part 285. This rule generally adopts these regulations and the FCCS by cross-reference, except for purposes of establishing the general scope of these regulations or in limited instances where these authorities expressly require the Board to issue its own regulations.
The regulations set forth the procedures the Board will follow in collecting debts owed to the United States to which part 267 applies. The regulations describe procedures with respect to referral of debts to Treasury or another agency for collection by administrative offset or other means, collection by administrative wage garnishment or salary offset, and the assessment of interest and other charges on debts.
Section 267.1—Purpose and scope. This part establishes procedures for collection of debts owed to the United States. It does not apply if another statute or regulation, or a rule, regulation, or policy adopted by the Board under authority granted to it by the Federal Reserve Act, governs or prohibits collection. For example, the Board has a debt collection policy that provides separate procedures for collecting debts from current employees. These regulations do not apply to the collection of any debts that the Board chooses to collect solely under its debt collection policy rather than these regulations. Thus, the Board is not creating any right to individuals to use the process offered under this regulation for any debt the Board chooses to collect solely under its debt collection policy. In collecting debts under this part, the Board will also follow the procedures set forth in 5 CFR part 550, subpart K, 31 CFR part 285, and the FCCS.
Section 267.2—Definitions. The definitions in this section are generally based on the FCCS, the DCIA, and related authorities. For purposes of this part, a debt or claim owed to the United States is defined as including a debt owed to the Board, including a debt or claim for repayment of Board-funded benefits administered through the Office of Employee Benefits of the Federal Reserve System, but does not include any debt the Board chooses to collect solely under its debt collection policy.
Section 267.3—Referral of debts for collection action, including offset. This section indicates which debts may be referred to the U.S. Department of the Treasury for collection, including by centralized offset and offset of tax refunds, and adopts procedural protections provided under the FCCS and DCIA prior to such referrals. The Board is not required to duplicate any prior notice or review opportunities already afforded to the debtor prior to referral. The Board may request that an agency other than the U.S. Department of the Treasury conduct non-centralized offset.
Section 267.4—Administrative wage garnishment. This section provides that the Board may collect debts from the wages of persons employed outside of the federal government through administrative wage garnishment. Before doing so, the debtor will be provided an opportunity for a hearing in accordance with the procedures described at 31 CFR 285.11(f).
Section 267.5—Salary offset. This section provides that the Board may collect debts from the wages of person employed at a federal agency (other than the Board) through offset of the person's federal agency salary. It adopts the basic requirements set forth under 5 CFR 550.1104 for the content of agency regulations governing salary offset. It also establishes detailed procedures for a hearing prior to salary offset.
Section 267.6—Interest, penalties, and administrative costs. This section follows the guidelines in the FCCS for charges on delinquent debts and, as required by the FCCS, clarifies when the Board will waive such charges during the pendency of any review.
This rule is not subject to the provisions of the Administrative Procedure Act (APA), 5 U.S.C. 553, requiring notice, public participation, and deferred effective date, because it relates solely to agency procedure and practice. 5 U.S.C. 553(b).
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., applies only to rules for which an agency publishes a notice of proposed rulemaking. Because a notice of proposed rulemaking for this rule is unnecessary, the Regulatory Flexibility Act does not apply to this final rule.
Section 722 of the Gramm-Leach-Bliley Act requires each federal banking agency to use plain language in all rules published after January 1, 2000. In light of this requirement, the Board believes this final rule is presented in a simple and straightforward manner and is consistent with this “plain language” directive.Start Printed Page 15503
Because the proposed rule provides for salary offset pursuant to 5 U.S.C. 5514, in accordance with that section and with 5 CFR 550.1105(a), the Board submitted the proposed rule to the Office of Personnel Management, which approved the rule.
For the reasons set forth in the preamble, the Board adds part 267 to Chapter II, in Title 12 of the Code of Federal Regulations to read as follows:
Referral of debts for collection action, including offset.
(c) Non-centralized offset. The Board may request an agency other than the U.S. Department of the Treasury to conduct non-centralized offset. Except in the situations described in 31 CFR 901.3(b)(4)(iii)(A)-(C), the Board will Start Printed Page 15504follow the procedures described in paragraph (b) of this section prior to making such a request. When making the request, the Board will certify in writing to the paying agency that the debtor owes the past due, legally enforceable delinquent debt in the amount stated, and that the Board has fully complied with these regulations.
The Board may collect debts, or refer debts for collection, from the wages of persons employed outside of the Federal Government by administrative wage garnishment in accordance with the requirements of 31 U.S.C. 3720D.
Prior to such garnishment, the debtor will be provided a hearing in accordance with the procedures described at 31 CFR 285.11(f).
(c) Petitions for hearing— (1) Time to petition. A Federal Government employee from whom the Board proposes to collect a debt under this section may request a hearing concerning the existence or amount of the debt or the offset schedule established by the Board by sending a written petition addressed to the official designated in the notice described in paragraph (b) of this section on or before the fifteenth day following receipt of such notice. A hearing will be granted on a petition that is not filed within such period only if the petitioner shows 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). In all other cases of late or non-filing of such a petition, the employee will be deemed to have waived the right to a hearing and will be subject to salary offset under this section.
(d) Form of hearings— (1) Hearing official. A hearing under this section will be conducted by an administrative law judge or another individual not under the supervision or control of the Board.
(3) Oral hearing. An employee who requests an oral hearing under this section will be provided such a hearing if the hearing official determines that the matter cannot be resolved by review of documentary evidence alone because an issue of credibility or veracity is involved. Where an oral hearing is appropriate, the hearing need not take the form of an evidentiary hearing, as long as both the employee and the Board are afforded a reasonable opportunity to present their case. Oral Start Printed Page 15505hearings may take the form of, but are not limited to:
By order of the Board of Governors of the Federal Reserve System, April 11, 2019.
[FR Doc. 2019-07537 Filed 4-15-19; 8:45 am]