[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR204.4]

[Page 204-205]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
PART 204--RULES RELATING TO DEBT COLLECTION--Table of Contents
 
                    Subpart A--Administrative Offset
 
Sec. 204.4  Demand for payment--notice.

    (a) Whenever possible, the Commission will seek written consent from 
the debtor to initiate immediate collection before starting the formal 
notification process.
    (b) In cases where written agreement to collect cannot be obtained 
from the debtor, a formal notification process shall be followed, (4 CFR 
102.2). Prior to collecting a claim by administrative offset, the 
Commission shall send to the debtor, by certified or registered mail 
with return receipt, a written demand for payment in terms which inform 
the debtor of the consequences of failure to cooperate. A total of three 
progressively stronger written demands at not more than 30 day intervals 
will normally be made unless a response to the first or second demand 
indicates that a further demand would be futile or the debtor's response 
does not require rebuttal, or other pertinent information indicates that 
additional written demands would be unnecessary. In determining the 
timing of the demand letters, the Commission should give due regard to 
the need to act promptly so that, as a general rule, if necessary to 
refer the debt to the Department of Justice for litigation, such 
referral can be made within one year of the final determination of the 
fact and the amount of the debt. When appropriate to protect the 
Government's interests (for example, to prevent the statute of 
limitations from expiring), written demand may be preceded by other 
appropriate actions, including immediate referral for litigation.
    (c) Before offset is made, a written notice will be sent to the 
debtor. This notice will include:
    (1) The nature and amount of the debt;
    (2) The date when payment is due (not less than thirty days from the 
date of mailing or hand delivery of the notice);
    (3) The agency's intention to collect the debt by administrative 
offset, including asking the assistance of other Federal agencies to 
help in the offset whenever possible, if the debtor has not made payment 
by the payment due date or has not made an arrangement for payment by 
the payment due date;
    (4) Any provision for interest, late payment penalties and 
administrative charges, if payment is not received by the due date;
    (5) The possible reporting of the claim to consumer reporting 
agencies and the possibility that the Commission will forward the claim 
to a collection agency;
    (6) The right of the debtor to inspect and copy the Commission's 
records related to the claim;

[[Page 205]]

    (7) The right of the debtor to request a review of the determination 
of indebtedness and, in the circumstances described below, to request an 
oral hearing from the Commission's designee;
    (8) The right of the debtor to enter into a written agreement with 
the agency to repay the debt in some other way; and
    (9) In appropriate cases, the right of the debtor to request a 
waiver.
    (d) Claims for payment of travel advances and employee training 
expenses require notification prior to administrative offset as 
described in this section. Because no oral hearing is required, notice 
of the right to a hearing need not be included in the notification.