Proposed Rule2021-15490
Threshold for Reporting VA Debts to Consumer Reporting Agencies
Primary source
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Published
July 23, 2021
Issuing agencies
Veterans Affairs Department
Abstract
The Department of Veterans Affairs (VA) proposes to amend its regulations around the conditions by which VA benefits debts or medical debts are reported to consumer reporting agencies (CRA). The Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 provides the Secretary authority to prescribe regulations that establish the minimum amount of a benefits or medical debt that the Secretary will report to the CRA. This proposed change will establish the methodology for determining a minimum threshold for debts reported to CRA.
Full Text
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<title>Federal Register, Volume 86 Issue 139 (Friday, July 23, 2021)</title>
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[Federal Register Volume 86, Number 139 (Friday, July 23, 2021)]
[Proposed Rules]
[Pages 38958-38960]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-15490]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 1
RIN 2900-AR20
Threshold for Reporting VA Debts to Consumer Reporting Agencies
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
regulations around the conditions by which VA benefits debts or medical
debts are reported to consumer reporting agencies (CRA). The Johnny
Isakson and David P. Roe, M.D. Veterans Health Care and Benefits
Improvement Act of 2020 provides the Secretary authority to prescribe
regulations that establish the minimum amount of a benefits or medical
debt that the Secretary will report to the CRA. This proposed change
will establish the methodology for determining a minimum threshold for
debts reported to CRA.
DATES: Comments must be received on or before September 21, 2021.
ADDRESSES: Comments may be submitted through <a href="http://www.regulations.gov">www.regulations.gov</a> or
mailed to Debt Management Center, Office of Management, 189, 1 Federal
Drive, Suite 4500, Fort Snelling, MN 55111. Comments should indicate
that they are submitted in response to ``RIN 2900-AR20--Threshold for
Reporting VA Debts to Consumer Reporting Agencies. Comments received
will be
[[Page 38959]]
available at <a href="http://regulations.gov">regulations.gov</a> for public viewing, inspection, or copies.
FOR FURTHER INFORMATION CONTACT: Jason Hoge, Director of Operations,
Debt Management Center, Office of Management, 189, 1 Federal Drive,
Suite 4500, Fort Snelling, MN 55111, (612) 725-4337. (This is not a
toll-free telephone number.)
SUPPLEMENTARY INFORMATION:
Summary of Proposed Regulatory Changes
We propose to amend VA's regulation that governs reporting of
delinquent debts to CRA. This rulemaking would update the regulation to
comply with section 2007 of Public Law 116-315, the Johnny Isakson and
David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of
2020. Section 2007 amends chapter 53 of title 38, United States Code by
adding section 5320 as follows: ``The Secretary shall prescribe
regulations that establish the minimum amount of a claim or debt,
arising from a benefit administered by the Under Secretary for Benefits
or Under Secretary for Health, that the Secretary will report to a
consumer reporting agency under section 3711 of title 31.''
This proposed amendment will establish the methodology for
determining the minimum threshold for reporting certain VA debts to
CRA. It will also exclude from the minimum threshold those debts in
which there is an indication of fraud, misrepresentation, or bad faith
on the part of the debtor.
Background on Governing Statutes
The Debt Collection Improvement Act of 1996 (DCIA), in part,
mandated agencies to report delinquent debts to CRA. 31 U.S.C. 3711(e);
Sec. 31001(k), Public Law 104-134, 110 Stat. 1321. The purpose of the
DCIA includes maximizing collection of delinquent debts by ensuring
quick action to recover debts, use of appropriate collection tools, and
minimizing the costs of debt collection. Sec. 31001(b), Public Law 104-
134.
Section 5320 of title 38, United States Code, authorizes VA to
``establish the minimum amount of a claim or debt, arising from a
benefit administered by the Under Secretary for Benefits or Under
Secretary for Health, that the Secretary will report to a consumer
reporting agency under section 3711 of title 31.'' The intent of
section 5320 is to lessen negative impact of CRA reports on Veterans.
Introduction to Proposed Regulatory Changes
As explained in more detail below, we propose to amend 38 CFR 1.916
to comply with 38 U.S.C. 5320, to establish a minimum threshold for
reporting debts to CRA.
In accordance with 31 U.S.C. 3711(e), the VA Debt Management Center
(DMC) is responsible for reporting delinquent debts to CRA. Prior to
January 5, 2021, DMC reported an average of 5,000 delinquent Veteran
accounts monthly. DMC regularly receives complaints from Veterans whose
accounts have been reported to CRA. Common complaints from Veterans
include: Loss of security clearance, inability to obtain approval for
home loans or home refinancing, and difficulty securing rental housing.
This proposed amendment recognizes that the debts described in 38
U.S.C. 5320 are fundamentally different from consumer debt. Debts
arising from a benefit administered by the Under Secretary for Benefits
or the Under Secretary for Health may result from a variety of
scenarios, including overpayments that are not the fault of the
Veteran.
Section 5320 authorizes the Secretary to establish a minimum
threshold that will ultimately reduce the number of debts that will be
reported to CRA. This will, in turn, decrease the number of Veterans
negatively impacted by these reports. The VA's mission is to ``care for
those who shall have borne the battle and for their families and
survivors.'' Negative credit reports may cause housing insecurity or
job loss, and this result is inconsistent with VA's mission.
38 CFR 1.916-- Disclosure of Debt Information to Consumer Reporting
Agencies (CRA)
We propose to amend 38 CFR 1.916, which sets forth the requirements
for reporting delinquent debts to CRA, by inserting subparagraphs
(c)(1) through (3) to provide the methodology used by the Secretary to
establish the minimum threshold. This section would also clarify that
the minimum threshold applies only to a debt of an individual that
arises from a benefit administered by the Under Secretary for Benefits
or Under Secretary for Health.
We propose subparagraphs (c)(1) through (3) state:
1. The Secretary has established a minimum threshold for a debt,
arising from a benefit administered by the Under Secretary for Benefits
or Under Secretary for Health, that the Secretary will report to a
consumer reporting agency under section 3711 of title 31.
(2) VA will only report those debts that meet the following
standards:
(i) The debt is classified as currently not collectible. For
purposes of this paragraph, the debt is currently not collectible if VA
has exhausted available collection efforts, including, as appropriate,
referrals for administrative offset and enforced collection;
(ii) The debt is not owed by an individual who is determined by VA
to be catastrophically disabled or has reported to VA a gross household
income below the applicable geographically adjusted income limits that
would entitle a VA beneficiary to cost-free health care, medications
and/or beneficiary travel; and
(iii) The outstanding debt amount is over $25, or such higher
amount VA may from time to time prescribe, in accordance with section
1.921 of this part.
(3) The minimum threshold set forth in this paragraph will not
apply if there is an indication of fraud, misrepresentation, or bad
faith on the part of the individual in connection with the debt.
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Information and Regulatory Affairs has determined that
this rule is not a significant regulatory action under Executive Order
12866. The Regulatory Impact Analysis associated with this rulemaking
can be found as a supporting document at <a href="http://www.regulations.gov">www.regulations.gov</a>.
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed rule will not
have a significant economic impact on a substantial number of small
entities as they are defined in the Regulatory Flexibility Act (5
U.S.C. 601-612). The regulations established by this rulemaking do not
impose burdens or otherwise regulate the activities of any small
entities outside of VA. Therefore, pursuant to 5 U.S.C. 605(b), the
initial and final regulatory flexibility analysis requirements of 5
U.S.C. 603 and 604 do not apply.
[[Page 38960]]
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule will have no such effect
on State, local, and tribal governments, or on the private sector.
Paperwork Reduction Act
This proposed rule contains no provisions constituting a collection
of information under the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3521).
Catalog of Federal Domestic Assistance
There are no Catalog of Federal Domestic Assistance numbers and
titles for this rule.
List of Subjects in 38 CFR Part 1
Administrative practice and procedure, Archives and records,
Cemeteries, Claims, Courts, Crime, Flags, Freedom of information,
Government contracts, Government employees, Government property,
Infants and children, Inventions and patents, Parking, Penalties,
Postal Service, Privacy, Reporting and recordkeeping requirements,
Seals and insignia, Security measures, Wages.
Signing Authority
Denis McDonough, Secretary of Veterans Affairs approved this
document on June 23, 2021 and authorized the undersigned to sign and
submit the document to the Office of the Federal Register for
publication electronically as an official document of the Department of
Veterans Affairs.
Luvenia Potts,
Regulations Development Coordinator, Office of Regulation Policy &
Management, Office of the Secretary, Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs proposes to amend 38 CFR part 1 as set forth below:
PART 1--GENERAL PROVISIONS
0
1. The authority citation for part 1 is revised to read as follows:
Authority: 31 U.S.C. 3711(e); 38 U.S.C. 501, 5701(g) and (i); 38
U.S.C. 5320.
Sec. 1.916 [Amended]
0
2. Amend Sec. 1.916 by revising paragraph (c) to read as follows:
* * * * *
(c) Subject to the conditions set forth in this paragraph and
paragraph (d) of this section, information concerning individuals may
be disclosed to consumer reporting agencies for inclusion in consumer
reports pertaining to the individual, or for the purpose of locating
the individual. Disclosure of the fact of indebtedness will be made if
the individual fails to respond in accordance with written demands for
repayment, or refuses to repay a debt to the United States. In making
any disclosure under this section, VA will provide consumer reporting
agencies with sufficient information to identify the individual,
including the individual's name, address, if known, date of birth, VA
file number, and Social Security number.
(1) The Secretary has established a minimum threshold for a debt,
arising from a benefit administered by the Under Secretary for Benefits
or Under Secretary for Health, that the Secretary will report to a
consumer reporting agency under section 3711 of title 31.
(2) VA will only report those debts that meet the following
standards:
(i) The debt is classified as currently not collectible. For
purposes of this paragraph, the debt is currently not collectible if VA
has exhausted available collection efforts, including, as appropriate,
referrals for administrative offset and enforced collection;
(ii) The debt is not owed by an individual who is determined by VA
to be catastrophically disabled or has reported to VA a gross household
income below the applicable geographically adjusted income limits that
would entitle a VA beneficiary to cost-free health care, medications
and/or beneficiary travel; and
(iii) The outstanding debt amount is over $25, or such higher
amount VA may from time to time prescribe, in accordance with section
1.921 of this part.
(3) The minimum threshold set forth in this paragraph will not
apply if there is an indication of fraud, misrepresentation, or bad
faith on the part of the individual in connection with the debt.
* * * * *
[FR Doc. 2021-15490 Filed 7-22-21; 8:45 am]
BILLING CODE 8320-01-P
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</html>Indexed from Federal Register on July 23, 2021.
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