§3720C Debt Collection Improvement Account

Summary

Creates a special fund in the Treasury called the Debt Collection Improvement Account and puts the Treasury Secretary in charge of it. Federal agencies may, no later than 30 days after the end of a fiscal year, transfer a calculated share of the delinquent debt they collected that year into the Account. That share is 5% of the year’s delinquent debt collected, minus the bigger of (a) 5% of what the agency collected last year or (b) 5% of the agency’s average annual collections over the previous 4 years. Transfers can come from various collection sources, such as offsets, the Department of Justice, private collectors, sales of delinquent loans, and asset-recovery contracts. The Office of Management and Budget can adjust an agency’s amount based on how quickly and actively the agency manages and refers debts. The Treasury may pay agencies back from the Account only for approved debt-management costs. These include account servicing, cross-servicing, computer systems, collecting and selling delinquent debt, handling assets, measures to reduce future delinquencies, and staff training. Money in the Account is spent only as Congress approves in appropriations laws. Any unspent balance that is still uncommitted three years after funds first became available, and every three years after that, must be returned to the Treasury’s general fund. The Treasury Secretary must write rules needed to run the Account.