15 U.S.C. § 1673 — Restriction on garnishment

Page 1550 TITLE 15—COMMERCE AND TRADE § 1671 sonal property for personal, family, or household pur- poses so as to— ‘‘(i) enable the lessee to compare more readily the various lease terms available to the lessee; ‘‘(ii) enable comparison of lease terms with credit terms, as appropriate; and ‘‘(iii) assure meaningful and accurate disclosures of lease terms in advertisements.’’ SUBCHAPTER II—RESTRICTIONS ON GARNISHMENT § 1671. Congressional findings and declaration of purpose (a) Disadvantages of garnishment The Congress finds: (1) The unrestricted garnishment of com- pensation due for personal services encourages the making of predatory extensions of credit. Such extensions of credit divert money into excessive credit payments and thereby hinder the production and flow of goods in interstate commerce. (2) The application of garnishment as a creditors’ remedy frequently results in loss of employment by the debtor, and the resulting disruption of employment, production, and consumption constitutes a substantial burden on interstate commerce. (3) The great disparities among the laws of the several States relating to garnishment have, in effect, destroyed the uniformity of the bankruptcy laws and frustrated the pur- poses thereof in many areas of the country. (b) Necessity for regulation On the basis of the findings stated in sub- section (a) of this section, the Congress deter- mines that the provisions of this subchapter are necessary and proper for the purpose of carrying into execution the powers of the Congress to regulate commerce and to establish uniform bankruptcy laws. (Pub. L. 90–321, title III, § 301, May 29, 1968, 82 Stat. 163.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 90–321, title V, § 504(c), May 29, 1968, 82 Stat. 167, provided that: ‘‘Title III [enacting this section and sections 1672 to 1677 of this title] takes effect on July 1, 1970.’’ § 1672. Definitions For the purposes of this subchapter: (a) The term ‘‘earnings’’ means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic pay- ments pursuant to a pension or retirement pro- gram. (b) The term ‘‘disposable earnings’’ means that part of the earnings of any individual re- maining after the deduction from those earnings of any amounts required by law to be withheld. (c) The term ‘‘garnishment’’ means any legal or equitable procedure through which the earn- ings of any individual are required to be with- held for payment of any debt. (Pub. L. 90–321, title III, § 302, May 29, 1968, 82 Stat. 163.) § 1673. Restriction on garnishment (a) Maximum allowable garnishment Except as provided in subsection (b) and in section 1675 of this title, the maximum part of the aggregate disposable earnings of an indi- vidual for any workweek which is subjected to garnishment may not exceed (1) 25 per centum of his disposable earnings for that week, or (2) the amount by which his disposable earn- ings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of title 29 in effect at the time the earnings are payable, whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph (2). (b) Exceptions (1) The restrictions of subsection (a) do not apply in the case of (A) any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative proce- dure, which is established by State law, which affords substantial due process, and which is subject to judicial review. (B) any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11. (C) any debt due for any State or Federal tax. (2) The maximum part of the aggregate dispos- able earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not ex- ceed— (A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individ- ual’s disposable earnings for that week; and (B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual’s disposable earnings for that week; except that, with respect to the disposable earn- ings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per cen- tum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek. (c) Execution or enforcement of garnishment order or process prohibited No court of the United States or any State, and no State (or officer or agency thereof), may make, execute, or enforce any order or process in violation of this section. (Pub. L. 90–321, title III, § 303, May 29, 1968, 82 Stat. 163; Pub. L. 95–30, title V, § 501(e)(1)–(3), May 23, 1977, 91 Stat. 161, 162; Pub. L. 95–598, title III, § 312(a), Nov. 6, 1978, 92 Stat. 2676.) Page 1551 TITLE 15—COMMERCE AND TRADE § 1679 Editorial Notes AMENDMENTS 1978—Subsec. (b)(1)(B). Pub. L. 95–598 substituted ‘‘court of the United States having jurisdiction over cases under chapter 13 of title 11’’ for ‘‘court of bank- ruptcy under chapter XIII of the Bankruptcy Act’’. 1977—Subsec. (b). Pub. L. 95–30, § 501(e)(1), (2), des- ignated existing provisions as par. (1) and existing pars. (1), (2), and (3) as subpars. (A), (B), and (C) thereof, sub- stituted ‘‘for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review’’ for ‘‘of any court for the support of any person’’ in subpar. (A) as so re- designated, and added par. (2). Subsec. (c). Pub. L. 95–30, § 501(e)(3), inserted ‘‘, and no State (or officer or agency thereof),’’ after ‘‘or any State’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–598 effective Oct. 1, 1979, see section 402(a) of Pub. L. 95–598, set out as an Effec- tive Date note preceding section 101 of Title 11, Bank- ruptcy. EFFECTIVE DATE OF 1977 AMENDMENT Pub. L. 95–30, title V, § 501(e)(5), May 23, 1977, 91 Stat. 162, provided that: ‘‘The amendments made by this sub- section [amending this section and section 1675 of this title] shall take effect on the first day of the first cal- endar month which begins after the date of enactment of this Act [May 23, 1977].’’ § 1674. Restriction on discharge from employ- ment by reason of garnishment (a) Termination of employment No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebted- ness. (b) Penalties Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both. (Pub. L. 90–321, title III, § 304, May 29, 1968, 82 Stat. 163.) § 1675. Exemption for State-regulated garnish- ments The Secretary of Labor may by regulation ex- empt from the provisions of section 1673(a) and (b)(2) of this title garnishments issued under the laws of any State if he determines that the laws of that State provide restrictions on garnish- ment which are substantially similar to those provided in section 1673(a) and (b)(2) of this title. (Pub. L. 90–321, title III, § 305, May 29, 1968, 82 Stat. 164; Pub. L. 95–30, title V, § 501(e)(4), May 23, 1977, 91 Stat. 162.) Editorial Notes AMENDMENTS 1977—Pub. L. 95–30 substituted ‘‘section 1673(a) and (b)(2) of this title’’ for ‘‘section 1673(a) of this title’’ in two places. § 1676. Enforcement by Secretary of Labor The Secretary of Labor, acting through the Wage and Hour Division of the Department of Labor, shall enforce the provisions of this sub- chapter. (Pub. L. 90–321, title III, § 306, May 29, 1968, 82 Stat. 164.) § 1677. Effect on State laws This subchapter does not annul, alter, or af- fect, or exempt any person from complying with, the laws of any State (1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or (2) prohibiting the discharge of any em- ployee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness. (Pub. L. 90–321, title III, § 307, May 29, 1968, 82 Stat. 164.) SUBCHAPTER II–A—CREDIT REPAIR ORGANIZATIONS § 1679. Findings and purposes (a) Findings The Congress makes the following findings: (1) Consumers have a vital interest in estab- lishing and maintaining their credit worthi- ness and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assist- ance from credit repair organizations which offer to improve the credit standing of such consumers. (2) Certain advertising and business prac- tices of some companies engaged in the busi- ness of credit repair services have worked a fi- nancial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters. (b) Purposes The purposes of this subchapter are— (1) to ensure that prospective buyers of the services of credit repair organizations are pro- vided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or de- ceptive advertising and business practices by credit repair organizations. (Pub. L. 90–321, title IV, § 402, as added Pub. L. 104–208, div. A, title II, § 2451, Sept. 30, 1996, 110 Stat. 3009–455.) Editorial Notes PRIOR PROVISIONS A prior title IV of Pub. L. 90–321, May 29, 1968, 82 Stat. 164, as amended by Pub. L. 91–344, July 20, 1970, 84 Stat. 440; Pub. L. 92–321, June 30, 1972, 86 Stat. 382, which was set out as a note under section 1601 of this title, estab- lished a bipartisan National Commission on Consumer Finance to study the functioning and structure of the consumer finance industry as well as consumer credit transactions generally. The Commission was to submit a final report by Dec. 31, 1972, and was to cease to exist thereafter. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 90–321, title IV, § 413, as added by Pub. L. 104–208, div. A, title II, § 2451, Sept. 30, 1996, 110 Stat.