Appendix C to Part 212 - Examples of the Lookback Period and Protected Amount
31:2.1.1.1.10.2.1.1.3 : Appendix C
Appendix C to Part 212 - Examples of the Lookback Period and
Protected Amount
The following examples illustrate this definition of lookback
period.
Example 1: Account review performed same day garnishment order is
served.A financial institution receives garnishment order on
Wednesday, March 17. The financial institution performs account
review the same day on Wednesday, March 17. The lookback period
begins on Tuesday, March 16, the date preceding the date of account
review. The lookback period ends on Saturday, January 16, the
corresponding date two months earlier. Example 2: Account review
performed the day after garnishment order is served.A financial
institution receives garnishment order on Wednesday, November 17.
The financial institution performs account review next business day
on Thursday, November 18. The lookback period begins on Wednesday,
November 17, the date preceding the date of account review. The
lookback period ends on Friday, September 17, the corresponding
date two months earlier. Example 3: No corresponding date two
months earlier.A financial institution receives garnishment order
on Tuesday, August 30. The financial institution performs the
account review two business days later on Thursday, September 1.
The lookback period begins on Wednesday, August 31, the date
preceding the date of account review. The lookback period ends on
Wednesday, June 30, the last date of the month two months earlier,
since June 31 does not exist to correspond with August 31. Example
4: Weekend between receipt of garnishment order and account
review.A financial institution receives garnishment order on
Friday, December 10. The financial institution performs the account
review two business days later on Tuesday, December 14. The
lookback period begins on Monday, December 13, the date preceding
the date of account review. The lookback period ends on Wednesday,
October 13, the corresponding date two months earlier.
The following examples illustrate the definition of protected
amount.
Example 1: Account balance less than sum of benefit payments.A
financial institution receives a garnishment order against an
account holder for $2,000 on May 20. The date of account review is
the same day, May 20, and the balance in the account when the
review is performed is $1,000. The lookback period begins on May
19, the date preceding the date of account review, and ends on
March 19, the corresponding date two months earlier. The account
review shows that two Federal benefit payments were deposited to
the account during the lookback period totaling $2,500, one for
$1,250 on Friday, April 30 and one for $1,250 on Tuesday, April 1.
Since the $1,000 balance in the account when the account review is
performed is less than the $2,500 sum of benefit payments posted to
the account during the lookback period, the financial institution
establishes the protected amount at $1,000. The financial
institution is not required to send a notice to the account holder.
Example 2: Three benefit payments during lookback period.A
financial institution receives a garnishment order against an
account holder for $8,000 on December 2. The date of account review
is the same day, December 2, and the balance in the account when
the account review is performed is $5,000. The lookback period
begins on December 1, the date preceding the date of account
review, and ends on October 1, the corresponding date two months
earlier. The account review shows that three Federal benefit
payments were deposited to the account during the lookback period
totaling $4,500, one for $1,500 on December 1, another for $1,500
on November 1, and a third for $1,500 on October 1. Since the
$4,500 sum of the three benefit payments posted to the account
during the lookback period is less than the $5,000 balance in the
account when the account review is performed, the financial
institution establishes the protected amount at $4,500 and seizes
the remaining $500 in the account consistent with State law. The
financial institution is required to send a notice to the account
holder. Example 3: Intraday transactions.A financial institution
receives a garnishment order against an account holder for $4,000
on Friday, September 10. The date of account review is Monday,
September 13, when the opening balance in the account is $6,000. A
cash withdrawal for $1,000 is processed after the open of business
on September 13, but before the financial institution has performed
the account review, so that the balance in the account is $5,000
when the financial institution initiates an automated program to
conduct the account review. The lookback period begins on Sunday,
September 12, the date preceding the date of account review, and
ends on Monday, July 12, the corresponding date two months earlier.
The account review shows that two Federal benefit payments were
deposited to the account during the lookback period totaling
$3,000, one for $1,500 on Wednesday, July 21, and the other for
$1,500 on Wednesday, August 18. Since the $3,000 sum of the two
benefit payments posted to the account during the lookback period
is less than the $5,000 balance in the account when the account
review is performed, the financial institution establishes the
protected amount at $3,000 and, consistent with State law, freezes
the $2,000 remaining in the account after the cash withdrawal. The
financial institution is required to send a notice to the account
holder. Example 4: Benefit payment on date of account review.A
financial institution receives a garnishment order against an
account holder for $5,000 on Thursday, July 1. The date of account
review is the same day, July 1, when the opening balance in the
account is $3,000, and reflects a Federal benefit payment of $1,000
posted that day. The lookback period begins on Wednesday, June 30,
the date preceding the date of account review, and ends on Friday,
April 30, the corresponding date two months earlier. The account
review shows that two Federal benefit payments were deposited to
the account during the lookback period totaling $2,000, one for
$1,000 on Friday, April 30 and one for $1,000 on Tuesday, June 1.
Since the $2,000 sum of the two benefit payments posted to the
account during the lookback period is less than the $3,000 balance
in the account when the account review is performed, the financial
institution establishes the protected amount at $2,000 and places a
hold on the remaining $1,000 in the account in accordance with
State law. The financial institution is required to send a notice
to the account holder. Example 5: Account co-owners with benefit
payments.A financial institution receives a garnishment order
against an account holder for $3,800 on March 22. The date of
account review is the same day, March 22, and the balance in the
account is $7,000. The lookback period begins on March 21, the date
preceding the date of account review, and ends on January 21, the
corresponding date two months earlier. The account review shows
that four Federal benefit payments were deposited to the account
during the lookback period totaling $7,000. Two of these benefit
payments, totaling $3,000, were made to the account holder against
whom the garnishment order was issued. The other two payments,
totaling $4,000, were made to a co-owner of the account. Since the
financial institution must perform the account review based only on
the presence of benefit payments, without regard to the existence
of co-owners on the account or payments to multiple beneficiaries
or under multiple programs, the financial institution establishes
the protected amount at $7,000, equal to the sum of the four
benefit payments posted to the account during the lookback period.
Since $7,000 is also the balance in the account at the time of the
account review, there are no additional funds in the account which
can be frozen. The financial institution is not required to send a
notice to the account holder. [76 FR 9955, Feb. 23, 2011, as
amended at 78 FR 32109, May 29, 2013]