[Federal Register Volume 71, Number 242 (Monday, December 18, 2006)]
[Rules and Regulations]
[Pages 75659-75662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21470]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 313

RIN 3064-AD12


Procedures for Corporate Debt Collection

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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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 
313.

DATES: Effective Date: This rule is effective on December 18, 2006.

[[Page 75660]]


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.

SUPPLEMENTARY INFORMATION:

1. Background

    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 
include:
    (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.  
313.1.
    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 
any

[[Page 75661]]

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. 
605(b).

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 
requirements.

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.


0
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 
follows:

PART 313--PROCEDURES FOR COLLECTION OF CORPORATE DEBT AND CRIMINAL 
RESTITUTION DEBT

0
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).


0
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 
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; 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).
* * * * *

0
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.
* * * * *

0
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 
delegate; to:
* * * * *

0
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.


[[Page 75662]]


Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E6-21470 Filed 12-15-06; 8:45 am]
BILLING CODE 6714-01-P