Compliance Question of the Week

We received a garnishment for a member who receives “protected benefits,” but the benefits come in the form of a check. The member is telling us that we have to give him his money back. What do we do?

Federal law requires you to conduct an account review to determine if there are protected funds in the account. The funds must be directly deposited to the account and should be coded as a protected payment. Some of the protected funds include social security payments, veterans pay and retired railroad workers pay.

Washington State law does not require you to determine which funds are exempt from garnishment, regardless of how they are posted to the account. However, you must still follow the federal guidelines for federal benefit payment exemptions and look-back periods.

Oregon law not only requires you to exempt the federal benefit payments, but they also have a list of payments that are exempt from garnishment if they are deposited via direct deposit or electronic deposit. Some of these funds include any type of state assistance, unemployment compensation, workers compensation and retirement plans. However, if funds are deposited by check, the funds are not exempt from garnishments.

In any circumstance, the individual can challenge the garnishment by contacting the issuer of the garnishment and completing the challenge form required under state law. 

Related Links

RCW 6.27.140
ORS 18.784
12 CFR 212


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Community Impact, Compliance News, Federal.