1.This Act may be cited as the
Illegal Garnishment Prevention
Act
.
2.Prohibition on use of funds to promote
direct deposit of Veterans and Social Security benefits until assurance of
protection from attachment or garnishment
(a)Congress makes the following
findings:
(1)Section 5301(a)(1) of title 38 of the
United States Code provides that Veterans benefit payments shall be
exempt from the claim of creditors, and shall not be liable to attachment,
levy, or seizure by or under any legal or equitable process whatever, either
before or after receipt by the beneficiary.
.
(2)Section 207 of the Social Security Act (42
U.S.C. 407) provides that Social Security benefits shall not “be subject to
execution, levy, attachment, garnishment, or other legal process, or to the
operation of any bankruptcy or insolvency law.”.
(3)Congress intended for Veterans and Social
Security benefits to provide at least a minimum subsistence for our nation's
veterans, elderly, and disabled.
(4)Social Security
benefits are the only source of income for over 20 percent of Social Security
recipients.
(5)Many financial institutions are garnishing
accounts on behalf of creditors in order to recover debt owed to them, and are
assessing fees on bank accounts into which Veterans and Social Security
benefits are electronically deposited.
(6)Many recipients of these benefits are left
temporarily destitute when financial institutions freeze access to their only
source of income.
(7)Despite the lack of protections for direct
deposit recipients of Veterans and Social Security benefits, the Treasury is
spending millions of dollars encouraging veterans, seniors, and other
recipients of social security benefits to use direct deposit for receipt of
their benefits.
(b)No funds appropriated or otherwise made
available to the Secretary of the Treasury, the Secretary of Veterans Affairs,
or the Commissioner of Social Security for fiscal year 2010 or any fiscal year
thereafter may be used to promote or otherwise encourage recipients of old-age,
survivors, or disability insurance benefits paid under title II of the Social
Security Act, or veterans benefits provided under the laws administered by the
Secretary of Veterans Affairs, to use direct deposit for payment of such
benefits, or to otherwise promote the use of direct deposit for such benefits,
until the Secretary of the Treasury promulgates rules establishing procedures
to ensure that such benefits are protected from attachment and garnishment in
accordance with the requirements of section 207 of the Social Security Act (42
U.S.C. 407), and at least 5 of the 7 members of the advisory committee
established under subsection (c) concur in advising the Secretary of the
Treasury that such procedures provide adequate safeguards.
(c)
(1)There is hereby established an Advisory
Committee to be known as the Social Security Benefits Protection from
Attachment or Garnishment Advisory Committee
.
(2)The Committee shall be comprised of 7
members comprised of, or appointed by the following:
(A)The Secretary of the Treasury.
(B)The Chair of the Committee on Ways and
Means of the House of Representatives.
(C)The Ranking Member of the Committee on Ways
and Means of the House of Representatives.
(D)The Chair of the Committee on Finance of
the Senate.
(E)The Ranking Member of the Committee on
Finance of the Senate.
(F)The Chair of the Special Committee on Aging
of the Senate.
(G)The Ranking Member of the Special Committee
on Aging of the Senate.
(3)The Secretary of the Treasury shall
establish meetings of the Committee.
(4)The Committee shall review the procedures
promulgated by the Secretary of the Treasury to carry out subsection (b) and,
upon the concurrence of at least 5 members of the Committee, advise the
Secretary of the Treasury as to the adequacy of such procedures with respect to
protecting old-age, survivors, or disability insurance benefits paid under
title II of the Social Security Act from attachment and garnishment.
(5)The Committee shall
not be subject to the Federal Advisory Committee Act (5 U.S.C. App.).