A bank that receives a garnishment order against an account holding directly deposited federal benefits is supposed to protect up to two months of those deposits and tell the account holder in writing. Treasury estimates about 487,750 such notices a year. The figure comes from an October 26 Treasury filing that renews the paperwork behind the rule.
What the 487,750 estimate covers
The Treasury notice, published October 26 in the Federal Register, asks for comment on extending OMB control number 1505-0230, the Notice to Account Holder for Garnishment of Accounts Containing Federal Benefit Payments. It lists 487,750 respondents and 487,750 responses a year, with total burden of 76,688 hours.
The estimate assumes 10 minutes per account-holder notice and 5 minutes per child support notice, and Treasury does not split the total between the two. It is a paperwork-burden estimate, not a count of garnishments or of people. A single account holder could receive a notice for each order.
Treasury’s supporting statement reports no program changes since 2023, though it describes a revised method for estimating the burden. Written comments are due December 28, 2026, to the Treasury PRA Clearance Officer, at PRA@treasury.gov or through Regulations.gov.
Two months of benefits that a bank cannot freeze
The rule is Treasury’s 31 CFR Part 212. Under it, a bank sets a protected amount equal to the lesser of the benefit payments posted during the two months before the account review or the balance on the review date. Treasury’s own example has three $1,500 deposits and a $5,000 balance, which gives a protected amount of $4,500.
The bank cannot freeze that amount, and the account holder does not have to claim an exemption to reach it. Only money above the protected amount follows the bank’s usual handling, including a freeze. For someone whose benefits arrive by direct deposit, that is the difference between a garnished account and an emptied one.
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The review is due within two business days after the bank receives the order and enough information to identify the account. It runs separately for each account, with no tracing of funds between them. It ignores commingled money, co-owners and whether the debt is large or small.
The 5-minute child support notices in Treasury’s estimate cover a different step. The filing says the estimate includes attaching a Notice of Right to Garnish Federal Benefits to certain orders, and the cost of keeping garnishment records under section 212.11. Both sit inside the same 487,750 total.
The review happens once per order. Later deposits are not garnished unless a new or different order arrives. If the order comes with a Notice of Right to Garnish Federal Benefits attached, as with certain child support orders, the bank follows its customary procedures instead of running the review.
When the written notice goes out
The bank must send a notice only in some cases. According to the FDIC examination manual, it is required when a benefit payment was deposited during the lookback period, the balance on the review date was above zero, and funds exceed the protected amount.
It must go out within three business days of the account review. One notice may cover several accounts. The bank can use the model notice in Appendix A of the regulation, and using it properly counts as compliance.
The notice has to name the order and the date it was served, explain garnishment in plain terms, and give the protected amount and the account it applies to. It also lists any amount frozen, any fee charged and the covered benefit payments, and names the creditor.
It must tell the account holder about the right to claim additional exemptions and to consult an attorney or legal aid. The notice is where an account holder first sees those rights spelled out for a specific order.
Fees are limited. No garnishment fee may be charged against the protected amount. A bank can charge one within five business days of the review only against non-benefit money deposited in that window, and never for more than those deposits.
What the estimate means for one account
The annual figure shows how routine the paperwork is, but it says nothing about any one account. For a person who gets a notice, the numbers that matter are the protected amount, the amount frozen above it and the date the order was served.
Records of the bank’s compliance must be kept for at least two years from receipt of the order. A notice that lists a protected amount smaller than two months of deposits, or a fee taken from benefit money, is the kind of mismatch worth raising with the bank in writing.
The open question is whether the notice a bank sends matches what the rule requires, and whether the account holder reads it in time to act on the part of the balance that is not protected.
Account frozen after a garnishment order?
When a creditor reaches an account, the money above the protected amount can sit frozen while a response deadline runs. An account holder who cannot show which deposits were benefits may have a harder time proving what the rule protects.
The Bank Account & Debt Protection Kit explains the 2-month bank protection rule and includes the frozen-account response. It also has debt-validation steps and a debt inventory, call log and deadline tracker, so every notice, date and call lands in one place.
Get the frozen-account response and two-month rule guide →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 17 Medicare Money Moves Now That Part D Caps at $2,400
This article was produced with AI assistance and edited for accuracy against the sources linked above.
