A newly by the U.S. Environmental Protection Agency (EPA) would give the agency the authority to cut into the paychecks of those who owe it a debt, such as a fine or penalty for an alleged environmental violation. EPA would be allowed to garnish up to 15 percent of the “disposable pay” of delinquent debtors who do not work for the federal government via a process known as administrative wage garnishment – all without a court order.
Presently, EPA does not use administrative wage garnishment (AWG) to collect federal debt. Relying on the , the agency seeks to amend its regulations to implement AWG as a debt collection tool, maintaining that it does not need to first obtain a court judgment before garnishing a private citizen’s wages.
A is a legal procedure that requires a person’s employer to withhold a certain amount of money from his/her paycheck and then to send that money directly to the person’s creditor to pay off a debt. Wage garnishment can negatively affect credit, reputation, and the ability to receive a loan or open a bank account.
EPA is accepting public comment until Sept. 2 on this controversial change to its debt collection procedures, which would significantly expand the agency’s power.
Background
In 1996, Congress passed the Debt Collection Improvement Act (DCIA), giving federal agencies greater authority and more tools, like administrative wage garnishment, to recover delinquent debt. The U.S. Treasury took the lead in writing rules to implement the AWG and other tools under the DCIA. Some DCIA-authorized debt collection tools are mandatory, but the usage of AWG is discretionary. To date, the use of DCIA wage garnishment authority has largely been confined to federal agencies that offer direct payments or loans to citizens, as opposed to a means of collecting agency-imposed fines and penalties.
Those who may find themselves the target of a garnishment proceeding must be given notice of their alleged debt and an opportunity to have a hearing to dispute the debt. According to the , and as noted in the preamble to EPA’s proposed rule, “federal agencies must either prescribe their own conforming regulations for the conduct of AWG hearings consistent with the … Treasury Final Rule or adopt Treasury’s AWG regulations, , without change by reference.”
Flawed Procedures
EPA has the flexibility to establish and implement effective collection strategies that suit its needs, provided those strategies meet all statutory and regulatory requirements. However, would identically incorporate by reference U.S. Treasury’s existing regulations on wage garnishment, including the hearing procedures. The practical implications of EPA adopting the U.S. Treasury’s existing AWG regulations, without change, could deprive the public of the right to a fair and impartial hearing because—
- It would allow EPA to decide unilaterally whether a debtor will get a chance to present his/her defense to EPA at a face-to-face oral proceeding. The agency may, instead, choose to review the case on a paper record, without listening to the debtor.
- It would grant EPA the sole discretion to decide where any hearing would be heard; assuming the agency even allows such a proceeding to take place.
- It would make the accused guilty until proven innocent by putting the ultimate burden of convincing the hearing official by a preponderance of the evidence of the correctness of the debtor’s position.