12 C.F.R. PART 1704—DEBT COLLECTION
Title 12 - Banks and Banking
Authority: 5 U.S.C. 5514; 26 U.S.C. 6402(d); 31 U.S.C. 3701–3720A.
Source: 64 FR 34969, June 30, 1999, unless otherwise noted. Redesignated at 65 FR 81328, Dec. 26, 2000.
(a) Authority. The Office of Federal Housing Enterprise Oversight (OFHEO) issues this part 1704 under the authority of 5 U.S.C. 5514 and 31 U.S.C. 3701–3720A, and in conformity with the FCCS at 4 CFR chapter II; the regulations on salary offset issued by the Office of Personnel Management at 5 CFR part 550, subpart K; and the regulations on tax refund offset issued by the Internal Revenue Service at 26 CFR 301.6402–6. (b) Scope. (1) This part 1704 applies to debts that are owed to the Federal Government by Federal employees, other persons, organizations, or entities that are indebted to OFHEO, and by Federal employees of OFHEO who are indebted to other agencies, except for those debts listed in paragraph (b)(2) of this section. (2) Subparts B and C of this part 1704 do not apply to: (i) Debts or claims arising under the Internal Revenue Code (26 U.S.C. 1 et seq.) or the tariff laws of the United States; (ii) Any case to which the Contract Disputes Act (41 U.S.C. 601 et seq.) applies; (iii) Any case where collection of a debt is explicitly provided for or provided by another statute, e.g. travel advances under 5 U.S.C. 5705 and employee training expenses under 5 U.S.C. 4108, or, as provided for by title 11 of the United States Code, when the claims involve bankruptcy; (iv) Any debt based in whole or in part on conduct in violation of the antitrust laws or involving fraud, the presentation of a false claim, or misrepresentation on the part of the debtor or any party having an interest in the claim, unless the Department of Justice authorizes OFHEO to handle the collection; (v) Claims between agencies; or (vi) A claim that has been outstanding for more than 10 years after the creditor agency's right to collect the debt first accrued, unless facts material to the Federal Government's right to collect were not known and could not reasonably have been known by the officials charged with the responsibility for discovery and collection of such debts. (3) Nothing in this part 1704 precludes the compromise, suspension, or termination of collection actions, where appropriate under the FCCS, or the use of alternative dispute resolution methods if they are not inconsistent with applicable law and regulations. (4) Nothing in this part 1704 precludes an employee from requesting waiver of an erroneous payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 U.S.C. 716, or from questioning the amount or validity of a debt, in the manner set forth in this part 1704. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] The following definitions apply to the terms used in this part 1704, unless the term is defined elsewhere in this part 1704. (a) Administrative offset means an action, pursuant to 31 U.S.C. 3716, in which the Federal Government withholds funds payable to, or held by the Federal Government for a person, organization, or other entity in order to collect a debt from that person, organization, or other entity. Such funds include funds payable by the Federal Government on behalf of a State Government. (b) 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. (c) Claim or debt (used interchangeably in this part 1704) means any amount of funds or property that has been determined by an agency official to be due the Federal Government by a person, organization, or entity, except another agency. It also means any amount of money, funds, or property owed by a person to a State, the District of Columbia, American Samoa, Guam, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the Commonwealth of Puerto Rico. A claim or debt includes: (1) Funds owed on account of loans made, insured, or guaranteed by the Federal Government, including any deficiency or any difference between the price obtained by the Federal Government in the sale of a property and the amount owed to the Federal Government on a mortgage on the property; (2) Expenditures of non-appropriated funds; (3) Overpayments, including payments disallowed by audits performed by the Inspector General of the agency administering the program; (4) Any amount the Federal Government is authorized by statute to collect for the benefit of any person; (5) The unpaid share of any non-Federal partner in a program involving a Federal payment, and a matching or cost-sharing payment by the non-Federal partner; (6) Any fines or penalties assessed by an agency; and (7) Other amounts of money or property owed to the Federal Government. (d) Certification means a written statement received by a paying agency from a creditor agency that request the paying agency to offset the salary of an employee and specifies that required procedural protections have been afforded the employee. (e) Compromise means the settlement or forgiveness of a debt. (f) Creditor agency means the agency to which the debt is owed, including a debt collection center when acting in behalf of a creditor agency in matters pertaining to the collection of a debt. (g) Debt. See Claim or debt in paragraph (c) of this section. (h) Debt collection center means the Department of the Treasury or any other 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). (i) Debtor means the person, organization, or entity owing money to the Federal Government. (j) Disposable pay means that part of current basic pay, special pay, incentive pay, retired pay, or retainer pay (or in the case of an employee not entitled to basic pay, other authorized pay) remaining after the deduction of any amount required by law to be withheld (other than deductions to execute garnishment orders in accordance with 5 CFR parts 581 and 582). Among the legally required deductions that OFHEO must apply first to determine disposable pay are levies pursuant to the Internal Revenue Code (title 26, United States Code) and deductions described in 5 CFR 581.105 (b) through (f), as follows: (1) Federal employment taxes; (2) Amounts withheld for the United States Soldiers' and Airmen's Home; (3) Amounts deducted for Medicare; (4) Fines and forfeiture ordered by a court-martial or by a commanding officer; (5) Federal, State, or local income taxes to the extent authorized or required by law, but no greater than would be the case if the employee claimed all dependents to which her or she is entitled and such additional amounts for which the employee presents evidence of a tax obligation supporting the additional withholding; (6) Health insurance premiums; (7) Normal retirement contributions, including employee contributions to the Thrift Savings Plan; and (8) Normal life insurance premiums, e.g., Serviceman's Group Life Insurance and “Basic Life” Federal Employee's Group Life Insurance premiums, not including amounts deducted for supplementary coverage. (k) Employee means a current employee of OFHEO or other agency, including a current member of the Armed Forces or a Reserve of the Armed Forces of the United States. (l) FCCS means the Federal Claims Collection Standards at 4 CFR chapter II. (m) Hearing official means an individual who is responsible for conducting any hearing with respect to the existence or amount of a debt claimed and for rendering a decision on the basis of such hearing. A hearing official may not be under the supervision or control of the Director of OFHEO when OFHEO is the creditor agency but may be an administrative law judge. (n) Notice of Intent means a written notice of a creditor agency to a debtor that states that the debtor owes a debt to the creditor agency and apprises the debtor of the applicable procedural rights. (o) Notice of salary offset means a written notice from the paying agency to an employee after a certification has been issued by a creditor agency that informs the employee that salary offset will begin at the next officially established pay interval. (p) Paying agency means an agency of the Federal Government that employs the individual who owes a debt to an agency of the Federal Government. (q) Salary offset means an administrative offset to collect a debt under 5 U.S.C. 5514 by deductions at one or more officially established pay intervals from the current pay account of an employee without his or her consent. (r) Waiver means the cancellation, remission, forgiveness, or non-recovery of a debt allegedly owed by an employee to OFHEO or another agency as permitted or required by 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 2774, 32 U.S.C. 716, or any other law. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] (a) Collection activity. The collection of debts directly and by offset shall be pursued in accordance with this part 1704. This part 1704 incorporates all applicable debt collection provisions of the FCCS and supplements the FCCS by the prescription of procedures necessary and appropriate for the operations of OFHEO. (b) Referral of delinquent debts. (1) OFHEO shall transfer to the Secretary of the Department of the Treasury any past due, legally enforceable nontax debt that has been delinquent for a period of 180 days or more so that the Secretary may take appropriate action to collect the debt or terminate collection action in accordance with 31 U.S.C. 3716, 5 U.S.C. 5514, the FCCS, 5 CFR 550.1108, and 31 CFR part 285. (2) OFHEO may transfer any past due, legally enforceable nontax debt that has been delinquent for less than a period of 180 days to a debt collection center for collection in accordance with 31 U.S.C. 3716, 5 U.S.C. 5514, 5 CFR 550.1108, 31 CFR part 285, and the FCCS. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] (a) Authority. OFHEO may collect debts owed by employees to the Federal Government by means of salary offset under the authority of 5 U.S.C. 5514, 5 CFR part 550, subpart K, and this subpart B. (b) Scope. (1) The procedures set forth in this subpart B apply to situations where OFHEO is attempting to collect a debt by salary offset that is owed to it by an individual employed by OFHEO or by another agency; or where OFHEO employs an individual who owes a debt to another agency. (2) The procedures set forth in this subpart B do not apply to: (i) Any routine intra-agency adjustment of pay that is attributable to clerical or administrative error or delay in processing pay documents that have occurred within the four pay periods preceding the adjustment, or any adjustment to collect a debt amounting to $50 or less. However, at the time of any such adjustment, or as soon thereafter as possible, OFHEO or its designated payroll agent shall provide the employee with a written notice of the nature and the amount of the adjustment and a point of contact for contesting such adjustment. (ii) Any negative adjustment to pay that arises from an employee's election of coverage or a change in coverage under a Federal benefits program that requires periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less. However, at the time the such adjustment is made, OFHEO or its payroll agent shall provide in the employee's earnings statement a clear and concise statement that informs the employee of the previous overpayment. (a) Notice of Intent. Deductions from an employee's salary may not be made unless OFHEO provides the employee with a Notice of Intent a minimum of 30 calendar days before the salary offset is initiated. (b) Contents of Notice of Intent. The Notice of Intent shall advise the employee of the following: (1) OFHEO has reviewed the records relating to the claim and has determined that the employee owes the debt; (2) OFHEO intends to collect the debt by deductions from the employee's current disposable pay account; (3) The amount of the debt and the facts giving rise to the debt; (4) The frequency and amount of the intended deduction (stated as a fixed dollar amount or as a percentage of pay not to exceed 15 percent of disposable pay), and the intention to continue the deductions until the debt and all accumulated interest are paid in full or otherwise resolved; (5) The name, address, and telephone number of the person to whom the employee may propose a written alternative schedule for voluntary repayment, in lieu of salary offset. The employee shall include a justification for the alternative schedule in his or her proposal. If the terms of the alternative schedule are agreed upon by the employee and OFHEO, the alternative written schedule shall be signed by both the employee and OFHEO; (6) An explanation of OFHEO's policy concerning interest, penalties, and administrative costs, including a statement that such assessments must be made unless excused in accordance with the FCCS; (7) The employee's right to inspect and copy all records of OFHEO pertaining to his or her debt that are not exempt from disclosure or to receive copies of such records if he or she is unable personally to inspect the records as the result of geographical or other constraints; (8) The name, address, and telephone number of the OFHEO employee to whom requests for access to records relating to the debt must be sent; (9) The employee's right to a hearing conducted by an impartial hearing official with respect to the existence and amount of the debt claimed or the repayment schedule i.e., the percentage of disposable pay to be deducted each pay period, so long as a request is filed by the employee as prescribed in §1704.23; the name and address of the office to which the request for a hearing should be sent; and the name, address, and telephone number of a person whom the employee may contact concerning procedures for requesting a hearing; (10) The filing of a request for a hearing on or before the 15th calendar day following receipt of the Notice of Intent will stay the commencement of collection proceedings and a final decision on whether a hearing will be held (if a hearing is requested) will be issued at the earliest practical date; (11) OFHEO shall initiate certification procedures to implement a salary offset unless the employee files a request for a hearing on or before the 15th calendar day following receipt of the Notice of Intent; (12) Any knowingly false or frivolous statement, representations, or evidence may subject the employee to: (i) Disciplinary procedures appropriate under 5 U.S.C. chapter LXXV, 5 CFR part 752, or any other applicable statutes or regulations; (ii) Penalties under the False Claims Act, 31 U.S.C. 3729–3731, or under any other applicable statutory authority; or (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or under any other applicable statutory authority; (13) Any other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; (14) Unless there are applicable contractual or statutory provisions to the contrary, amounts paid on or deducted from debts that are later waived or found not to be owed to the Federal Government shall be promptly refunded to the employee; and (15) Proceedings with respect to the debt are governed by 5 U.S.C. 5514. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] (a) Request for review. An employee who desires to inspect or copy OFHEO records related to a debt owed by the employee to OFHEO must send a letter to the individual designated in the Notice of Intent requesting access to the relevant records. The letter must be received in the office of that individual within 15 calendar days after the employee's receipt of the Notice of Intent. (b) Review location and time. In response to a timely request submitted by the employee, the employee shall be notified of the location and time when the employee may inspect and copy records related to his or her debt that are not exempt from disclosure. If the employee is unable personally to inspect such records as the result of geographical or other constraints, OFHEO shall arrange to send copies of such records to the employee. (a) Request for a hearing—(1) Time-period for submission. An employee who requests a hearing on the existence or amount of the debt held by OFHEO or on the salary-offset schedule proposed by OFHEO, must send such request to OFHEO. The request for a hearing must be received by OFHEO on or before the 15th calendar day following receipt by the employee of the Notice of Intent. (2) Failure to submit timely. If the employee files a request for a hearing after the expiration of the 15th calendar day, OFHEO may accept the request if the employee can show that the delay was the result of circumstances beyond his or her control or that he or she failed to receive actual notice of the filing deadline. (3) Contents of request. The request for a hearing must be signed by the employee and must fully identify and explain with reasonable specificity all the facts, evidence, and witnesses, if any, that the employee believes support his or her position. The employee must also specify whether he or she requests an oral hearing. If an oral hearing is requested, the employee should explain why a hearing by examination of the documents without an oral hearing would not resolve the matter. (4) Failure to request a hearing. The failure of an employee to request a hearing will be considered an admission by the employee that the debt exits in the amount specified in the Notice of Intent that was provided to the employee under §1704.21(b). (b) Obtaining the services of a hearing official—(1) Debtor is not OFHEO employee. When the debtor is not an OFHEO employee and OFHEO cannot provide a prompt and appropriate hearing before an administrative law judge or other hearing official, OFHEO may request a hearing official from an agent of the paying agency, as designated in 5 CFR part 581, appendix A, or as otherwise designated by the paying agency. (2) Debtor is OFHEO employee. When the debtor is an OFHEO employee, OFHEO may contact any agent of another agency, as designated in 5 CFR part 581, appendix A, or as otherwise designated by the agency, to request a hearing official. (c) Procedure—(1) Notice of hearing. After the employee requests a hearing, the hearing official shall notify the employee of the form of the hearing to be provided. If the hearing will be oral, the notice shall set forth the date, time, and location of the hearing, which must occur no more than 30 calendar days after the request is received, unless the employee requests that the hearing be delayed. If the hearing will be conducted by an examination of documents, the employee shall be notified within 30 calendar days that he or she should submit evidence and arguments in writing to the hearing official. (2) Oral hearing. (i) An employee who requests an oral hearing shall be provided an oral hearing if the hearing official determines that the matter cannot be resolved by an examination of the documents alone, as for example, when an issue of credibility or veracity is involved. The oral hearing need not be an adversarial adjudication and rules of evidence need not apply. Witnesses who testify in an oral hearing shall do so under oath or affirmation. (ii) Oral hearings may take the form of, but are not limited to: (A) Informal conferences with the hearing official in which the employee and agency representative are given full opportunity to present evidence, witnesses, and argument; (B) Informal meetings in which the hearing examiner interviews the employee; or (C) Formal written submissions followed by an opportunity for oral presentation. (3) Hearing by examination of documents. If the hearing official determines that an oral hearing is not necessary, he or she shall make the determination based upon an examination of the documents. (d) Record. The hearing official shall maintain a summary record of any hearing conducted under this section. (e) Decision. (1) The hearing official shall issue a written opinion stating his or her decision, based upon all evidence and information developed during the hearing, as soon as practicable after the hearing, but not later than 60 calendar days after the date on which the request was received by OFHEO, unless the hearing was delayed at the request of the employee, in which case the 60-day decision period shall be extended by the number of days by which the hearing was postponed. (2) The decision of the hearing official shall be final and is considered to be an official certification regarding the existence and the amount of the debt for purposes of executing salary offset under 5 U.S.C. 5514. If the hearing official determines that a debt may not be collected by salary offset, but OFHEO finds that the debt is still valid, OFHEO may seek collection of the debt through other means in accordance with applicable law and regulations. (f) Content of decision. The written decision shall include: (1) A summary of the facts concerning the origin, nature, and amount of the debt; (2) The hearing official's findings, analysis, and conclusions; and (3) The terms of any repayment schedules, if applicable. (g) Failure to appear. If, in the absence of good cause shown, such as illness, the employee or the representative of OFHEO fails to appear, the hearing official shall proceed with the hearing as scheduled, and make his or decision based upon the oral testimony presented and the documentation submitted by both parties. At the request of both parties, the hearing official may schedule a new hearing date. Both parties shall be given reasonable notice of the time and place of the new hearing. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] (a) Issuance. OFHEO shall issue a certification in all cases where the hearing official determines that a debt exists or the employee admits the existence and amount of the debt, as for example, by failing to request a hearing. (b) Contents. The certification must be in writing and state: (1) That the employee owes the debt; (2) The amount and basis of the debt; (3) The date of the Federal Government's right to collect the debt first accrued; (4) The date the employee was notified of the debt, the action(s) taken pursuant to OFHEO's regulations, and the dates such actions were taken; (5) If the collection is to be made by lump-sum payment, the amount and date such payment will be collected; (6) If the collection is to be made in installments, the amount or percentage of disposable pay to be collected in each installment and, if OFHEO wishes, the desired commencing date of the first installments, if a date other than the next officially established pay period; and (7) A statement that OFHEO's regulation on salary offset has been approved by the Office of Personnel Management pursuant to 5 CFR part 550, subpart K. (a) Proposed repayment schedule. In response to a Notice of Intent, an employee may propose to repay the debt voluntarily in lieu of salary offset by submitting a written proposed repayment schedule to OFHEO. Any proposal under this section must be received by OFHEO within 15 calendar days after receipt of the Notice of Intent. (b) Notification of decision. In response to a timely proposal by the employee, OFHEO shall notify the employee whether the employee's proposed repayment schedule is acceptable. OFHEO has the discretion to accept, reject, or propose to the employee a modification of the proposed repayment schedule. (1) If OFHEO decides that the proposed repayment schedule is unacceptable, the employee shall have 15 calendar days from the date he or she received notice of the decision in which to file a request for a hearing. (2) If OFHEO decides that the proposed repayment schedule is acceptable or the employee agrees to a modification proposed by OFHEO, an agreement shall be put in writing and signed by both the employee and OFHEO. (a) Request for review. (1) An employee subject to salary offset or a voluntary repayment agreement may, at any time, request a special review by OFHEO 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. (2) The request for special review must include an alternative proposed offset or payment schedule and a detailed statement, with supporting documents, that shows why the current salary offset or payments result in extreme financial hardship to the employee and his or her spouse and dependents. The detailed statement must indicate: (i) Income from all sources; (ii) Assets; (iii) Liabilities; (iv) Number of dependents; (v) Expenses for food, housing, clothing, and transportation; (vi) Medical expenses; and (vii) Exceptional expenses, if any. (b) Evaluation of request. OFHEO shall evaluate the statement and supporting documents and determine whether the original offset or repayment schedule imposes extreme financial hardship on the employee. OFHEO shall notify the employee in writing within 30 calendar days of such determination, including, if appropriate, a revised offset or payment schedule. If the special review results in a revised offset or repayment schedule, OFHEO shall provide a new certification to the paying agency. (a) Notice. Upon issuance of a proper certification by OFHEO (for debts owed to OFHEO) or upon receipt of a proper certification from another creditor agency, OFHEO shall send the employee a written notice of salary offset. (b) Content of notice. Such written notice of salary offset shall advise the employee of the: (1) Certification that has been issued by OFHEO or received from another creditor agency; (2) Amount of the debt and of the deductions to be made; and (3) Date and pay period when the salary offset will begin. (c) If OFHEO is not the creditor agency, OFHEO shall provide a copy of the notice of salary offset to the creditor agency and advise the creditor agency of the dollar amount to be offset and the pay period when the offset will begin. (a) Generally. OFHEO shall coordinate salary deductions under this section and shall determine the amount of an employee's disposable pay and the amount of the salary offset subject to the requirements in this section. Deductions shall begin the pay period following the issuance of the certification by OFHEO or the receipt by OFHEO of the certification from another agency, or as soon thereafter as possible. (b) Types of collection—(1) Lump-sum payment. If the amount of the debt is equal to or less than 15 percent of the employee's disposable pay, such debt ordinarily will be collected in one lump-sum payment. (2) Installment deductions. Installment deductions will be made over a period not greater than the anticipated period of employment. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. However, the amount deducted for any pay period 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 installment payment should normally be sufficient in size and frequency to liquidate the debt in no more than three years. Installment payments of less than $50 should be accepted only in the most unusual circumstances. (3) Lump-sum deductions from final check. In order to liquidate a debt, a lump-sum deduction exceeding 15 percent of disposable pay may be made pursuant to 31 U.S.C. 3716 from any final salary payment due a former employee, whether the former employee was separated voluntarily or involuntarily. (4) Lump-sum deductions from other sources. Whenever an employee subject to salary offset is separated from OFHEO, and the balance of the debt cannot be liquidated by offset of the final salary check, OFHEO may offset any later payments of any kind to the former employee to collect the balance of the debt pursuant to 31 U.S.C. 3716. (c) Multiple debts. (1) Where two or more creditor agencies are seeking salary offset, or where two or more debts are owed to a single creditor agency, OFHEO may, at his or her discretion, determine whether one or more debts should be offset simultaneously within the 15 percent limitation. (2) In the event that a debt owed OFHEO is certified while an employee is subject to salary offset to repay another agency, OFHEO may, at its discretion, determine whether the debt to OFHEO should be repaid before the debt to the other agency is repaid, repaid simultaneously with the other debt, or repaid after the debt to the other agency. (3) A levy pursuant to the Internal Revenue Code of 1986 shall take precedence over other deductions under this section, as provided in 5 U.S.C. 5514(d). (a) Responsibility of OFHEO as the creditor agency. (1) OFHEO shall be responsible for: (i) Arranging for a hearing upon proper request by a Federal employee; (ii) Preparing the Notice of Intent consistent with the requirements of §1704.21; (iii) Obtaining hearing officials from other agencies pursuant to §1704.23(b); and (iv) Ensuring that each certification of debt is sent to a paying agency pursuant to §1704.24(b). (2) Upon completion of the procedures set forth in §§1704.24–1704.26, OFHEO shall submit to the employee's paying agency, if applicable, a certified debt claim and an installment agreement or other instruction on the payment schedule. (i) If the employee is in the process of separating from the Federal Government, OFHEO shall submit its debt claim to the employee's paying agency for collection by lump-sum deduction from the employee's final check. The paying agency shall certify the total amount of its collection and furnish a copy of the certification to OFHEO and to the employee. (ii) If the employee is already separated and all payments due from his or her former paying agency have been paid, OFHEO may, unless otherwise prohibited, request that money due and payable to the employee from the Federal Government be administratively offset to collect the debt. (iii) When an employee transfers to another paying agency, OFHEO shall not repeat the procedures described in §§1704.24–1704.26. Upon receiving notice of the employee's transfer, OFHEO shall review the debt to ensure that collection is resumed by the new paying agency. (b) Responsibility of OFHEO as the paying agency—(1) Complete claim. When OFHEO receives a certified claim from a creditor agency, the employee shall be given written notice of the certification, the date salary offset will begin, and the amount of the periodic deductions. Deductions shall be scheduled to begin at the next officially established pay interval or as otherwise provided for in the certification. (2) Incomplete claim. When OFHEO receives an incomplete certification of debt from a creditor agency, OFHEO shall return the claim with notice that procedures under 5 U.S.C. 5514 and 5 CFR 550.1104 must be followed, and that a properly certified claim must be received before OFHEO will take action to collect the debt from the employee's current pay account. (3) Review. OFHEO is not authorized to review the merits of the creditor agency's determination with respect to the amount or validity of the debt certified by the creditor agency. (4) Employees who transfer from one paying agency to another agency. If, after the creditor agency has submitted the debt claim to OFHEO, the employee transfers to another agency before the debt is collected in full, OFHEO must certify the total amount collected on the debt. One copy of the certification shall be furnished to the employee and one copy shall be sent to the creditor agency along with notice of the employee's transfer. If OFHEO is aware that the employee is entitled to payments from the Civil Service Retirement and Disability Fund or other similar payments, it must provide written notification to the agency responsible for making such payments that the debtor owes a debt (including the amount) and that the requirements set forth herein and in 5 CFR part 550, subpart k, have been met. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] Where OFHEO is the creditor agency, OFHEO shall assess interest, penalties, and administrative costs pursuant to 31 U.S.C. 3717 and the FCCS. (a) Where OFHEO is the creditor agency, OFHEO shall promptly refund any amount deducted under the authority of 5 U.S.C. 5514 when: (1) OFHEO receives notice that the debt has been compromised or otherwise found not to be owing to the Federal Government; or (2) An administrative or judicial order directs OFHEO to make a refund. (b) Unless required by law or contract, refunds under this section shall not bear interest. (a) OFHEO may provide qualified personnel to serve as hearing officials upon request of a creditor agency when— (1) The debtor is employed by OFHEO and the creditor agency cannot provide a prompt and appropriate hearing before a hearing official furnished pursuant to another lawful arrangement; or (2) The debtor is employed by the creditor agency and that agency cannot arrange for a hearing official. (b) Services provided by OFHEO to creditor agencies under this section shall be provided on a fully reimbursable basis pursuant to 31 U.S.C. 1535. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] A debtor's payment, whether voluntary or involuntary, of all or any portion of a debt being collected pursuant to this subpart B shall not be construed as a waiver of any rights that the debtor may have under any statute, regulation, or contract, except as otherwise provided by law or contract. OFHEO may collect a debt owed to the Federal Government from a person, organization, or other entity by administrative offset, pursuant to 31 U.S.C. 3716, where: (a) The debt is certain in amount; (b) Administrative offset is feasible, desirable, and not otherwise prohibited; (c) The applicable statute of limitations has not expired; and (d) Administrative offset is in the best interest of the Federal Government. Prior to the completion of the procedures described in §1704.42, OFHEO may effect administrative offset if failure to offset would substantially prejudice its ability to collect the debt, and if the time before the payment is to be made does not reasonably permit completion of the procedures described in §1704.42. Such prior administrative offset shall be followed promptly by the completion of the procedures described in §1704.42. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] Unless the procedures described in §1704.41 are used, prior to collecting any debt by administrative offset or referring such claim to another agency for collection through administrative offset, OFHEO shall provide the debtor with the following: (a) Written notification of the nature and amount of the debt, the intention of OFHEO to collect the debt through administrative offset, and a statement of the rights of the debtor under this section; (b) An opportunity to inspect and copy the records of OFHEO related to the debt that are not exempt from disclosure; (c) An opportunity for review within OFHEO of the determination of indebtedness. Any request for review by the debtor shall be in writing and shall be submitted to OFHEO within 30 calendar days of the date of the notice of the offset. OFHEO may waive the time limits for requesting review for good cause shown by the debtor. OFHEO shall provide the debtor with a reasonable opportunity for an oral hearing when: (1) An applicable statute authorizes or requires OFHEO to consider waiver of the indebtedness involved, the debtor requests waiver of the indebtedness, and the waiver determination turns on an issue of credibility or veracity; or (2) The debtor requests reconsideration of the debt and OFHEO determines that the question of the indebtedness cannot be resolved by review of the documentary evidence, as for example, when the validity of the debt turns on an issue of credibility or veracity. Unless otherwise required by law, an oral hearing under this subpart C is not required to be a formal evidentiary hearing, although OFHEO shall document all significant matters discussed at the hearing. In those cases where an oral hearing is not required by this subpart C, OFHEO shall make its determination on the request for waiver or reconsideration based upon a review of the written record; and (d) An opportunity to enter into a written agreement for the repayment of the amount of the claim at the discretion of OFHEO. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] OFHEO shall assess interest, penalties, and administrative costs on debts owed to the Federal Government, in accordance with 31 U.S.C. 3717 and the FCCS. OFHEO may also assess interest and related charges on debts that are not subject to 31 U.S.C. 3717 and the FCCS to the extent authorized under the common law or other applicable statutory authority. OFHEO shall refund promptly those amounts recovered by administrative offset but later found not to be owed to the Federal Government. (a) OFHEO may request that a debt owed to OFHEO be collected by administrative offset against funds due and payable to a debtor by another agency. (b) In requesting administrative offset, OFHEO, as creditor, shall certify in writing to the agency holding funds of the debtor: (1) That the debtor owes the debt; (2) The amount and basis of the debt; and (3) That OFHEO has complied with the requirements of its own administrative offset regulations and the applicable provisions of the FCCS with respect to providing the debtor with due process. (a) Any agency may request that funds due and payable to a debtor by OFHEO be administratively offset in order to collect a debt owed to such agency by the debtor. (b) OFHEO shall initiate the requested administrative offset only upon: (1) Receipt of written certification from the creditor agency that: (i) The debtor owes the debt, including the amount and basis of the debt; (ii) The agency has prescribed regulations for the exercise of administrative offset; and (iii) The agency has complied with its own administrative offset regulations and with the applicable provisions of the FCCS, including providing any required hearing or review. (2) A determination by OFHEO that collection by administrative offset against funds payable by OFHEO would be in the best interest of the Federal Government as determined by the facts and circumstances of the particular case and that such administrative offset would not otherwise be contrary to law. (a) Request for administrative offset. Unless otherwise prohibited by law, OFHEO may request that monies that are due and payable to a debtor from the Civil Service Retirement and Disability Fund (Fund) be offset administratively in reasonable amounts in order to collect in one full payment or in a minimal number of payments debt owed to OFHEO by the debtor. Such requests shall be made to the appropriate officials of the Office of Personnel Management in accordance with such regulations as may be prescribed by the Director of the Office of Personnel Management. (b) Contents of certification. When making a request for administrative offset under paragraph (a) of this section, OFHEO shall include a written certification that: (1) The debtor owes OFHEO a debt, including the amount of the debt; (2) OFHEO has complied with the applicable statutes, regulations, and procedures of the Office of Personnel Management; and (3) OFHEO has complied with the requirements of the FCCS, including any required hearing or review. (c) If OFHEO decides to request administrative offset under paragraph (a) of this section, it shall make the request as soon as practicable after completion of the applicable procedures. This will satisfy any requirement that administrative offset be initiated prior to the expiration of the applicable statute of limitations. At such time as the debtor makes a claim for payments from the Fund, if at least one year has elapsed since the administrative offset request was originally made, the debtor shall be permitted to offer a satisfactory repayment plan in lieu of administrative offset if he or she establishes that changed financial circumstances would render the administrative offset unjust. (d) If OFHEO collects part or all of the debt by other means before deductions are made or completed pursuant to paragraph (a) of this section, OFHEO shall act promptly to modify or terminate its request for administrative offset under paragraph (a) of this section. The provisions of 26 U.S.C. 6402(d) and 31 U.S.C. 3720A authorize the Secretary of the Treasury to offset a delinquent debt owed the Federal Government from the tax refund due a taxpayer when other collection efforts have failed to recover the amount due. (a)(1) Debt means money owed by an individual, organization, or entity from sources which include loans insured or guaranteed by the Federal Government and all other amounts due the Federal Government from fees, leases, services, overpayments, civil and criminal penalties, damages, interest, fines, administrative costs, and all other similar sources. (2) A debt becomes eligible for tax refund offset procedures if: (i) It cannot currently be collected pursuant to the salary offset procedures of 5 U.S.C. 5514(a)(1); (ii) The debt is ineligible for administrative offset under 31 U.S.C. 3716(a) by reason of 31 U.S.C. 3716(c)(2), or it cannot be collected currently by administrative offset under 31 U.S.C. 3716(a); and (iii) The requirements of this section are otherwise satisfied. (3) All judgment debts are past due for purposes of this subpart D. Judgment debts remain past due until paid in full. (b) Dispute means a written statement supported by documentation or other evidence that all or part of an alleged debt is not past due or legally enforceable, that the amount is not the amount currently owed, that the outstanding debt has been satisfied, or in the case of a debt reduced to judgment, that the judgement has been satisfied or stayed. (c) Notice means the information sent to the debtor pursuant to §1704.53. The date of the notice is that date shown on the notice letter as its date of issuance. [64 FR 34969, June 30, 1999. Redesignated and amended at 65 FR 81328, Dec. 26, 2000] (a) Referral to the Department of the Treasury. (1) OFHEO may refer any past due, legally enforceable nonjudgment debt of an individual, organization, or entity to the Department of the Treasury for tax refund offset if OFHEO's or the referring agency's rights of action accrued more than three months but less than 10 years before the offset is made. (2) Debts reduced to judgment may be referred at any time. (3) Debts in amounts lower than $25 are not subject to referral. (4) In the event that more than one debt is owed, the tax refund offset procedures shall be applied in the order in which the debts became past due. (5) OFHEO shall notify the Department of the Treasury of any change in the amount due promptly after receipt of payment or notice of other reductions. (b) Notice. OFHEO shall provide the debtor with written notice of its intent to offset before initiating the offset. Notice shall be mailed to the debtor at the current address of the debtor, as determined from information obtained from the Internal Revenue Service pursuant to 26 U.S.C. 6103(m)(2), (4), (5) or maintained by OFHEO. The notice sent to the debtor shall state the amount of the debt and inform the debtor that: (1) The debt is past due; (2) OFHEO intends to refer the debt to the Department of the Treasury for offset from tax refunds that may be due to the taxpayer; (3) OFHEO intends to provide information concerning the delinquent debt exceeding $100 to a consumer reporting bureau unless such debt has already been disclosed; and (4) Before the debt is reported to a consumer reporting agency, if applicable, and referred to the Department of the Treasury for offset from tax refunds, the debtor has 65 calendar days from the date of notice to request a review under paragraph (d). (c) Report to consumer reporting agency. If the debtor neither pays the amount due nor presents evidence that the amount is not past due or is satisfied or stayed, OFHEO will report the debt to a consumer reporting agency at the end of the notice period, if applicable, and refer the debt to the Department of the Treasury for offset from the taxpayer's Federal tax refund. OFHEO shall certify to the Department of the Treasury that reasonable efforts have been made by OFHEO to obtain payment of such debt. (d) Request for review. A debtor may request a review by OFHEO if he or she believes that all or part of the debt is not past due or is not legally enforceable, or in the case of a judgment debt, that the debt has been stayed or the amount satisfied, as follows: (1) The debtor must send a written request for review to OFHEO at the address provided in the notice. (2) The request must state the amount disputed and reasons why the debtor believes that the debt is not past due, is not legally enforceable, has been satisfied, or if a judgment debt, has been satisfied or stayed. (3) The request must include any documents that the debtor wishes to be considered or state that additional information will be submitted within the time permitted. (4) If the debtor wishes to inspect records establishing the nature and amount of the debt, the debtor must make a written request to OFHEO for an opportunity for such an inspection. The office holding the relevant records not exempt from disclosure shall make them available for inspection during normal business hours within one week from the date of receipt of the request. (5) The request for review and any additional information submitted pursuant to the request must be received by OFHEO at the address stated in the notice within 65 calendar days of the date of issuance of the notice. (6) In reaching its decision, OFHEO shall review the dispute and shall consider its records and any documentation and arguments submitted by the debtor. OFHEO shall send a written notice of its decision to the debtor. There is no administrative appeal of this decision. (7) If the evidence presented by the debtor is considered by a non-OFHEO agent or other entities or persons acting on behalf of OFHEO, the debtor shall be accorded at least 30 calendar days from the date the agent or other entity or person determines that all or part of the debt is past due and legally enforceable to request review by OFHEO of any unresolved dispute. (8) Any debt that previously has been reviewed pursuant to this section or any other section of this part, or that has been reduced to a judgment, may not be disputed except on the grounds of payments made or events occurring subsequent to the previous review or judgment.
Title 12: Banks and Banking
PART 1704—DEBT COLLECTION
Section Contents
§ 1704.1 Authority and scope.
§ 1704.2 Definitions.
§ 1704.3 Collection of debts and referrals to the Department of the Treasury.
§§ 1704.4-1704.19 [Reserved]
§ 1704.20 Authority and scope.
§ 1704.21 Notice requirements before salary offset where OFHEO is the creditor agency.
§ 1704.22 Review of OFHEO records related to the debt.
§ 1704.23 Opportunity for a hearing where OFHEO is the creditor agency.
§ 1704.24 Certification where OFHEO is the creditor agency.
§ 1704.25 Voluntary repayment agreements as alternative to salary offset where OFHEO is the creditor agency.
§ 1704.26 Special review where OFHEO is the creditor agency.
§ 1704.27 Notice of salary offset where OFHEO is the paying agency.
§ 1704.28 Procedures for salary offset where OFHEO is the paying agency.
§ 1704.29 Coordinating salary offset with other agencies.
§ 1704.30 Interest, penalties, and administrative costs.
§ 1704.31 Refunds.
§ 1704.32 Request from a creditor agency for the services of a hearing official.
§ 1704.33 Non-waiver of rights by payments.
§§ 1704.34-1704.39 [Reserved]
§ 1704.40 Authority and scope.
§ 1704.41 Administrative offset prior to completion of procedures.
§ 1704.42 Procedures.
§ 1704.43 Interest.
§ 1704.44 Refunds.
§ 1704.45 Requests for administrative offset to other Federal agencies.
§ 1704.46 Requests for administrative offset from other Federal agencies.
§ 1704.47 Administrative offset against amounts payable from Civil Service Retirement and Disability Fund.
§§ 1704.48-1704.49 [Reserved]
§ 1704.50 Authority and scope.
§ 1704.51 Definitions.
§ 1704.52 Procedures.
Subpart A—General
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§ 1704.1 Authority and scope.
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§ 1704.2 Definitions.
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§ 1704.3 Collection of debts and referrals to the Department of the Treasury.
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§§ 1704.4-1704.19 [Reserved]
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Subpart B—Salary Offset
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§ 1704.20 Authority and scope.
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§ 1704.21 Notice requirements before salary offset where OFHEO is the creditor agency.
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§ 1704.22 Review of OFHEO records related to the debt.
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§ 1704.23 Opportunity for a hearing where OFHEO is the creditor agency.
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§ 1704.24 Certification where OFHEO is the creditor agency.
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§ 1704.25 Voluntary repayment agreements as alternative to salary offset where OFHEO is the creditor agency.
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§ 1704.26 Special review where OFHEO is the creditor agency.
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§ 1704.27 Notice of salary offset where OFHEO is the paying agency.
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§ 1704.28 Procedures for salary offset where OFHEO is the paying agency.
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§ 1704.29 Coordinating salary offset with other agencies.
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§ 1704.30 Interest, penalties, and administrative costs.
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§ 1704.31 Refunds.
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§ 1704.32 Request from a creditor agency for the services of a hearing official.
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§ 1704.33 Non-waiver of rights by payments.
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§§ 1704.34-1704.39 [Reserved]
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Subpart C—Administrative Offset
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§ 1704.40 Authority and scope.
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§ 1704.41 Administrative offset prior to completion of procedures.
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§ 1704.42 Procedures.
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§ 1704.43 Interest.
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§ 1704.44 Refunds.
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§ 1704.45 Requests for administrative offset to other Federal agencies.
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§ 1704.46 Requests for administrative offset from other Federal agencies.
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§ 1704.47 Administrative offset against amounts payable from Civil Service Retirement and Disability Fund.
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§§ 1704.48-1704.49 [Reserved]
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Subpart D—Tax Refund Offset
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§ 1704.50 Authority and scope.
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§ 1704.51 Definitions.
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§ 1704.52 Procedures.
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