FDIC Federal Register Citations

Thank you for the opportunity to comment on the proposed rules for dealing with garnishment of recipients of government benefits.

We are a bank.  We are not legal advisors for our depositors.  We are not a charitable organization that exists to advocate for our customers.  We are a for-profit corporation.  If the government feels this strongly that recipients of federal benefits need to have notification of their benefits r.e. exemption from garnishment, then the government should take responsibility for providing said disclosure.  For the government to slap banks with an unfunded mandate to be advocates for our depositors is unreasonable.

As a practical matter, this regulation is unenforceable.  For example, a benefit recipient gets his retirement deposit in the amount of $600 on the 3^rd of the month, and also deposits $400 cash one week later.  On the 15^th, the customer has $500 left in his account, when the bank account is garnished.  How much is the bank supposed to freeze?  This is a simplified example.  Imagine an example where the customer is making deposits and withdrawals on a daily basis.  Determining what portion represents federal benefits becomes impossible.  Whatever determination the bank would make will subject the bank to potential litigation from the creditor or the judgment debtor.

The only practical solution is to allow banks to abide by the garnishment orders, and leave it to judgment debtors to assert their rights under the law.

Phil Menhusen
State Exchange Bank
Mankato, KS