Back2Basics: Federal Benefits | Compliance Alliance

Which of the following payments would be considered a protected federal benefit under the rule?

A. An Internal Revenue Service tax refund deposited directly into the customer’s account

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B. A paper check issued by the Social Security Administration

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C. A payment from the Department of Veteran’s Affairs deposited directly into the customer’s account

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D. None of the above

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An account review is required to be performed within ______ after receiving a garnishment order

A. 3 days

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B. 2 days

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C. 1 day

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D. A reasonable time

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When a Notice of Right to Garnish Federal Benefit Payments is attached to a garnishment order, a bank should:

A. Freeze the account in the amount of the federal benefits deposited in the previous 2 months

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B. Follow the normal garnishment procedures of their institution

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C. Contact the accountholder immediately upon receipt of the Notice

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D. Initiate an account review of the accounts subject to the Notice

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When benefits have been paid after a beneficiary’s death, a federal agency may reclaim the benefits by:

A. Issuing a Notice of Reclamation

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B. Debiting the bank’s Federal Reserve account for amounts that the bank is liable for

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C. Pursuing claims against individuals who improperly withdrew the post-death benefits

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D. All of the above

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When a bank knows that an incoming federal benefit payment doesn’t match the name of the account owner:

A. It is required to notify the federal agency either by manually correcting and sending an NOC or by returning the payment with the appropriate code

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B. The bank is required to post to the correct account if possible

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C. The bank should place the payment in a suspense account while it contacts the federal agency

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D. The bank is required to post the payment and notify the federal agency of the error

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A representative payee:

A. Has control over all the beneficiary’s funds, whether from federal benefits or elsewhere

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B. Is appointed by a court

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C. Can name an agent or other authorized user to assist them with managing the beneficiary’s account and financial affairs

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D. Is required to act in the beneficiary’s best interest with regard to the benefits paid

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E. None of the above

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The “protected amount” refers to:

A. The amount that must be held in the account and made available for normal use during and after the processing of a garnishment order

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B. The amount that the bank must pay over to the creditor that sent the garnishment order

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C. The amount that must be held in the account and frozen while the garnishment is processed

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D. The amount of the garnishment

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After a garnishment is processed on a jointly held account, the bank is required to provide notice to:

A. The account holder named in the garnishment order

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B. All account holders on the account

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C. The federal benefits recipient

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D. The bank is not required to provide notice of the garnishment

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Under the Garnishment of Federal Benefits Rule, the record retention period for a garnishment orders is ____ from the date the garnishment order is received

A. 1 year

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B. 2 years

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C. 3 years

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D. 4 years

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In a federal benefits reclamation, the 45 Day Amount refers to the amount of federal benefits received:

A. In the 45 days immediately before the beneficiary’s death

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B. In the first 45 days after the bank was notified or became aware of the beneficiary’s death

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C. In the first 45 days after the date of the beneficiary’s death

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D. In the 45 days immediately preceding the Notice of Reclamation (NOR)

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