CUNA’s compliance staff went back to basics in a recent CompBlog post highlighting what credit unions should do when they receive a garnishment notice. The entry covers 5 steps credit unions should follow.

Determine whether a “Right to Garnish Federal Benefits” is attached

This must be done no later than 2 business days after receiving the order and prior to any action. If such a notice is included, the credit union must follow its customary procedures.

If no such notice is included, the credit union must perform an account review to determine whether the account holds any federal benefit payments, and if necessary, protect such federal benefit funds from garnishment.

Perform a Federal Benefits Account Review

This must occur no later than 2 business days following receipt of the order. The credit union will examine the deposits made into the account for the previous 2-month period (lookback period) to determine if a benefit agency has deposited a benefit payment into the account during that time.

 

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