12 C.F.R. Subpart B—Administrative Offset
Title 12 - Banks and Banking
The provisions of this subpart apply to the collection of debts owed to the United States arising from transactions with the FDIC. Administrative offset is authorized under the DCIA. This subpart is consistent with the FCCS on administrative offset issued by the Department of Justice. (a) Administrative offset means withholding funds payable by the United States to, or held by the United States for, a person to satisfy a debt. (b) Person includes a natural person or persons, profit or nonprofit corporation, partnership, association, trust, estate, consortium, or other entity which is capable of owing a debt to the United States Government except that agencies of the United States, or any state or local government shall be excluded. (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 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 the FDIC, as creditor agency, has complied with this part. (b) Prior to initiating collection by administrative offset, the Director 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. The FDIC may collect a debt by administrative offset prior to the completion of the procedures described in §313.25, if: (a) Failure to offset a payment would substantially prejudice the FDIC's ability to collect the debt; and (b) The time before the payment is to be made does not reasonably permit completion of the procedures described in §313.25. Such prior offsetting shall be followed promptly by the completion of the procedures described in §313.25. The FDIC shall not be required to follow the procedures described in §313.25 where: (a) The offset is in the nature of a recoupment (i.e., the FDIC may offset a payment due to the debtor when both the payment due to the debtor and the debt owed to the FDIC arose from the same transaction); or (b) The debt arises under a contract as set forth in Cecile Industries, Inc. v. Cheney, 995 F.2d 1052 (Fed. Cir. 1993), which provides that procedural protections under administrative offset do not supplant or restrict established procedures for contractual offsets accommodated by the Contracts Disputes Act; or (c) In the case of non-centralized administrative offsets, the FDIC 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 U.S. Government. Unless the procedures described in §313.23 are used, 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: (a) Written notification of the nature and amount of the claim, the intention of the Director to collect the claim through administrative offset, and a statement of the rights of the debtor under this paragraph; (b) An opportunity to inspect and copy the records of the FDIC with respect to the claim, unless such records are exempt from disclosure; (c) An opportunity to have the FDIC's determination of indebtedness reviewed by the Director: (1) Any request by the debtor for such review shall be in writing and shall be submitted to the FDIC within 30 calendar days of the date of the notice of the offset. The Director may waive the time limit for requesting review for good cause shown by the debtor; (2) Upon acceptance of a request for review by the debtor, the FDIC shall provide the debtor with a reasonable opportunity for an oral hearing when the determination turns on an issue of credibility or veracity, or the Director determines that the question of the indebtedness cannot be resolved by review of the documentary evidence alone. Unless otherwise required by law, an oral hearing under this section is not required to be a formal evidentiary hearing, although the Director shall document all significant matters discussed at the hearing. In cases where an oral hearing is not required by this section, the Director shall make his determination based on a documentary hearing consisting of 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 the Director. Pursuant to 31 U.S.C. 3717, the FDIC shall assess interest, penalties and administrative costs on debts owed to the United States. The FDIC is authorized to assess interest and 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. 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. Where the Director has previously 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. The Director may request that a debt owed to the FDIC be administratively offset against funds due and payable to a debtor by another federal agency. In requesting administrative offset, the FDIC, as the creditor agency, will certify in writing to the federal agency holding funds payable to the debtor: (a) That the debtor owes the debt; (b) The amount and basis of the debt; and (c) That the FDIC has complied with the requirements of its own administrative offset regulations and the applicable provisions of 31 U.S.C. 3716 with respect to providing the debtor with due process, unless otherwise provided. Any federal agency may request that funds due and payable to its debtor by the FDIC be administratively offset by the FDIC in order to collect a debt owed to such agency by the debtor. The FDIC 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 agency has complied with its own administrative offset regulations and with the applicable provisions of 31 CFR 901.3, including providing any required hearing or review. (b) A determination by the creditor agency that collection by offset against funds payable by the FDIC would be in the best interest of the United States and that such offset would not otherwise be contrary to law.
Title 12: Banks and Banking
PART 313—PROCEDURES FOR CORPORATE DEBT COLLECTION
Subpart B—Administrative Offset
§ 313.20 Applicability and scope.
§ 313.21 Definitions.
§ 313.22 Collection.
§ 313.23 Offset prior to completion of procedures.
§ 313.24 Omission of procedures.
§ 313.25 Debtor's rights.
§ 313.26 Interest.
§ 313.27 Refunds.
§ 313.28 No requirement for duplicate notice.
§ 313.29 Requests for offset to other federal agencies.
§ 313.30 Requests for offset from other federal agencies.
§§ 313.31-313.39 [Reserved]
