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[Federal Register: December 18, 2006 (Volume 71, Number 242)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 313
Procedures for Corporate Debt Collection
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending
12 CFR part 313, Procedures for Corporate Debt Collection, to include
delinquent criminal restitution debt within the debt covered by part
DATES: Effective Date: This rule is effective on December 18, 2006.
FOR FURTHER INFORMATION CONTACT: Rex Taylor, (703) 562-2453, or
Catherine A. Ribnick, (202) 898-3728, of the Legal Division, or Richard
Romero, (202) 898-8652, of the Division of Resolutions and Receiverships.
The Debt Collection Improvement Act of 1996 (DCIA) requires federal
agencies to collect debts owed to the United States in accordance with
regulations that either adopt, or at least are consistent with,
standards prescribed by the Department of Justice (DOJ) and Department
of the Treasury (Treasury). 31 U.S.C. 3711. These standards, known as
the Federal Claims Collection Standards (FCCS), became effective on
December 22, 2000. (see 31 CFR 900-904). The purpose of the DCIA is to
enhance the efficiency and effectiveness of the federal government's
efforts to collect debt owed to the United States. A principal feature
of the DCIA was the creation of the Treasury Offset Program (TOP), a
government-wide database of delinquent debtors that offsets (reduces)
federal payments to recipients who also owe delinquent debt to the
United States and that remits the offset amount to the creditor agency.
The FDIC is the creditor agency for delinquent restitution debts owed
to the FDIC. The recommended amendments do not affect the FDIC's
existing authority under part 313 to collect certain debts owed to the
FDIC in its corporate capacity.
In 2002, the FDIC in compliance with the DCIA promulgated 12 CFR
part 313 governing the collection of certain debt owed to the FDIC in
its corporate capacity by federal employees, including FDIC employees,
and certain third parties. Part 313 in its present form ``applies only
to [certain] debts owed to and payments made by the FDIC acting in its
corporate capacity; that is, in connection with employee matters such
as travel-related claims and erroneous overpayments, contracting
activities involving corporate operations, debts related to requests to
the FDIC for documents under the Freedom of Information Act (FOIA) or
where a request for an offset is received by the FDIC from another
federal agency.'' (See 12 CFR 313.1(c)). Part 313 also explicitly
states that it ``does not apply to debts owed to or payments made by
the FDIC in connection with the FDIC's liquidation, supervision,
enforcement, or insurance responsibilities.'' (Id.)
Under part 313, when the Director of the Division of Administration
(DOA) or the Director of the Division of Finance (DOF) determines that
it is appropriate to initiate procedures to collect corporate debt of
the type authorized by part 313, the Director must conform to the
procedural standards for collecting such debts set forth in part 313.
These standards generally prescribe the following steps in the debt
collection process: Prompt demand for payment of the debt; upon the
debtor's demand for a final agency determination, verification of the
existence and amount of the debt; standards for collecting debts in
installment payments; the assessment of interest, penalties, and
administrative costs on delinquent debts; standards for the compromise
of overdue debt; standards to be followed in determining whether to
suspend or terminate collection action; the required referral of
delinquent debts to FMS for collection; the reporting of debts to
consumer reporting agencies and the use of credit reports; and the sale
of delinquent debts. The Director also must follow the procedures for
the specific type of offset remedy to be utilized, which are provided
by the following subparts of part 313: Subpart B (administrative
offset), subpart C (salary offset), subpart D (administrative wage
garnishment), subpart E (tax refund offset), subpart F (Civil Service
retirement and disability fund offset), and subpart G (mandatory
centralized administrative offset).
The criminal restitution orders that the FDIC holds in almost all
instances are initially acquired by the FDIC in its receivership
capacity. Over time, the FDIC as receiver has transferred a substantial
number of individual restitution orders to the FDIC in its corporate
capacity, with the result that today criminal restitution debt is held
by the FDIC in both its receivership and corporate capacities. Because
part 313 as currently drafted excludes all of the FDIC's receivership
and liquidation functions (among other functions) from its scope, it
must be amended for the FDIC to have the authority to collect criminal
restitution debt through TOP.
The legal authority for the proposed amendments is found in the
DCIA itself. The DCIA's definition of ``debt'' includes criminal
restitution debt owed to federal agencies including the FDIC. Thus,
section 3701(b)(1)(D) of the DCIA defines ``claim'' or ``debt'' to
(D) Any amount the United States is authorized by statute to
collect for the benefit of any person.
Criminal restitution debt owed to the FDIC falls squarely within
this definition, regardless of whether that debt is owed to the FDIC in
its receivership capacity or its corporate capacity.
The United States Department of Justice is primarily responsible
for collecting unpaid federal criminal restitution debt. The Mandatory
Victims Restitution Act (MVRA) of 1996, 18 U.S.C. 3556 & 3663 seq.,
which makes imposition of restitution a mandatory component of
sentencing for many federal crimes, including banking crimes, expressly
provides in section 3664(m) that the United States has the authority to
enforce all federal criminal restitution orders in all cases. Moreover,
the Federal Debt Collection Procedures Act (FDCPA), 28 U.S.C. 3001 et
seq., originally enacted in 1990, is the primary statutory authority
that DOJ uses to collect criminal restitution orders on behalf of the
victims identified in those orders, which include the FDIC in the case
of restitution orders held by the FDIC. The FDCPA also explicitly
defines ``debt'' to include ``an amount that is owing to the United
States on account of * * * restitution.'' 28 U.S.C. 3002(3)(B). United
States Attorney's Offices throughout the United States use the MVRA and
FDCPA to collect and enforce criminal restitution debt on behalf of the
FDIC and other victims including other federal agencies. If DOJ does
not enforce an individual order, the victim named in the order may seek
to enforce it instead.
II. Discussion of the Amendments to Part 313
The amendments would modify part 313 in three ways:
1. A number of individual sections of part 313 are amended to
provide that part 313 applies to criminal restitution debt owed to the
FDIC in either its corporate or receivership capacity in addition to
the already-covered corporate debts currently identified in Sec.
2. Section 313.4 is amended to provide that the FDIC Board
delegates to the Director of the Division of Resolutions and
Receiverships (DRR) authority to refer delinquent criminal restitution
debt to FMS.
3. A new section 313.125 is added to subpart E, the Tax Refund
Offset regulations, to clarify that duplicate notice to a debtor is not
required if notice and an opportunity for review were previously
provided to the same debtor. This provision is identical to the
existing Sec. 313.28 found in the Administrative Offset regulations in
subpart B. While Sec. 313.28 arguably already applies to subpart E
(because tax refund offset is generally considered to be a form of
``administrative'' offset), the new Sec. 313.125 is added to eliminate
uncertainty in the FDIC's regulations on this point.
III. Administrative Procedure Act
Neither advance notice of proposed rulemaking nor an opportunity to
comment on the amendments to part 313 is required under the
Administrative Procedure Act (APA), because these amendments relate
solely to agency procedure and practice. 5 U.S.C. 553(b)(3)(A).
IV. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act, the FDIC hereby
certifies that the amendments to part 313 do not have a significant
economic impact on a substantial number of small business entities. As
amended, part 313 applies primarily to federal agencies and to a
limited number of individuals and/or business entities. 5 U.S.C.
V. Paperwork Reduction Act
This rule is not subject to the Paperwork Reduction Act, 44 U.S.C.
3501, because it does not contain any new information collection
VI. Assessment of Impact of Federal Regulation on Families
The FDIC has determined that part 313 as amended will not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, enacted as part of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act, 1999 (Pub.
L. 105-277, 112 Stat. 2681).
VII. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) (Pub. L. 104-121) provides generally for agencies to report
rules to Congress for review. The reporting requirement is triggered
when the FDIC issues a final rule as defined by the APA at 5 U.S.C.
551. Because the FDIC is issuing a final rule as defined by the APA,
the FDIC will file the reports required by SBREFA. The Office of
Management and Budget has determined that this final rule does not
constitute a ``major rule'' as defined by SBREFA.
List of Subjects in 12 CFR Part 313
Claims, Government employees, Wages.
For the reasons set forth in the preamble, the FDIC hereby amends part
313 of chapter III of title 12 of the Code of Federal Regulations as
PART 313--PROCEDURES FOR COLLECTION OF CORPORATE DEBT AND CRIMINAL
1. The authority citation for part 313 is revised to read as follows:
Authority: 12 U.S.C. 1819(a); 5 U.S.C. 5514; Pub. L. 104-143;
110 Stat. 1321 (31 U.S.C. 3701, 3711, 3716).
2. Revise Sec. 313.1(c) to read as follows:
Sec. 313.1 Scope.
* * * * *
(c) This part applies only to:
(1) Debts owed to and payments made by the FDIC acting in its
corporate capacity, that is, in connection with employee matters such
the FDIC for documents under the Freedom of Information Act (FOIA), or
federal agency; and
(2) Criminal restitution debt owed to the FDIC in either its
corporate capacity or its receivership capacity.
(3) With the exception of criminal restitution debt noted in
paragraph (c)(2) of this section, this part does not apply to debts
owed to or payments made by the FDIC in connection with the FDIC's
liquidation, supervision, enforcement, or insurance responsibilities,
nor does it limit or affect the FDIC's authority with respect to debts
and/or claims pursuant to 12 U.S.C. 1819(a) and 1820(a).
* * * * *
3. In Sec. 313.3 revise paragraphs (d), (h), and (j); redesignate
paragraphs (n) through (v) as paragraphs (o) through (w), respectively;
add a new paragraph (n); and revise the newly designated paragraph (r)
to read as follows:
Sec. 313.3 Definitions.
* * * * *
(d) Certification means a written statement transmitted from a
creditor agency to a paying agency for purposes of administrative or
salary offset, to FMS for offset or to the Secretary of the Treasury
for centralized administrative offset. The certification confirms the
existence and amount of the debt and verifies that required procedural
protections have been afforded the debtor. Where the debtor requests a
hearing on a claimed debt, the decision by a hearing official or
administrative law judge constitutes a certification.
* * * * *
(h) Debt means an amount owed to the United States from loans
insured or guaranteed by the United States and all other amounts due
the United States from fees, leases, rents, royalties, services, sales
of real or personal property, overpayments, penalties, damages,
interest, restitution, fines and forfeitures, and all other similar
sources. For purposes of this part, a debt owed to the FDIC constitutes
a debt owed to the United States.
(j) Director means the Director of the Division of Finance (DOF),
the Director of the Division of Administration (DOA), or the Director
of the Division of Resolutions and Receiverships (DRR), as applicable,
or the applicable Director's delegate.
(n) Division of Resolutions and Receiverships (DRR) means the
Division of Resolutions and Receiverships of the FDIC.
(r) Notice of Intent to Offset or Notice of Intent means a written
notice from a creditor agency to an employee, organization, entity, or
restitution debtor that claims a debt and informs the debtor that the
creditor agency intends to collect the debt by administrative offset.
The notice also informs the debtor of certain procedural rights with
respect to the claimed debt and offset.
4. Revise the introductory paragraph in Sec. 313.4 to read as follows:
Sec. 313.4 Delegations of authority.
Authority to conduct the following activities to collect debt,
other than criminal restitution debt, on behalf of the FDIC in its
corporate capacity is delegated to the Director of DOA or Director of
DOF, as applicable; and authority to collect criminal restitution debt
on behalf of the FDIC in either its receivership or corporate capacity
is delegated to the Director of DRR; or to the applicable Director's
* * * * *
5. Redesignate Sec. 313.125 through 313.127 as Sec. 313.126 through
313.128 and add a new Sec. 313.125 to read as follows:
Sec. 313.125 No requirement for duplicate notice.
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 tax refund offset.
By order of the Board of Directors.
Dated at Washington, DC, this 5th day of December, 2006.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
[FR Doc. E6-21470 Filed 12-15-06; 8:45 am]
BILLING CODE 6714-01-P