Treasury Asks How Banks Should Explain Garnished Benefit Payments
Published Date: 10/26/2026
Notice
Summary
The Treasury Department wants your thoughts on how banks notify people when their federal benefit payments get garnished (partly taken for debts). This affects banks, state and local governments, and anyone receiving federal benefits. Comments are due by December 28, 2026, and the process aims to keep paperwork light while protecting your rights and money.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Banks must notify when benefits are garnished
You will get a notice from your bank when a garnishment order affects an account receiving directly deposited federal benefit payments. Under 31 CFR 212.6 the notice must explain the garnishment order, the protected amount, any applicable fee, and your account-holder rights.
Estimated time burden on banks and governments
Treasury estimates 487,750 notices will be issued annually related to garnishments of accounts with federal benefits. The estimate assumes 10 minutes per account-holder notice, 5 minutes per child support notice, and a total annual burden of 76,688 hours for private sector and state/local/tribal respondents.
Child-support orders must include rights notice
Treasury's supporting statement requires attaching a 'Notice of Right to Garnish Federal Benefits' to certain child support orders. The estimate assumes each child support notice takes about 5 minutes to handle.
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