[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1655.14]

[Page 289-290]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1655_LOAN PROGRAM--Table of Contents
 
Sec.  1655.14  Loan payments.

    (a) Loan payments must be made through payroll deduction in 
accordance with the loan agreement. Once loan payments begin, the 
employing agency cannot terminate the payroll deductions at the 
employee's request, unless the TSP instructs it to do so. For example, 
employing agencies must stop loan payments if the participant becomes a 
debtor in a chapter 13 bankruptcy action, unless the bankruptcy court 
expressly permits the payments to continue.
    (b) The participant may make additional payments by mailing a 
personal check or guaranteed funds to the TSP record keeper. If the TSP 
receives a payment that repays the outstanding loan amount and overpays 
the loan by $10.00 or more, the overpayment will be refunded to the 
participant. Overpayments of less than $10 will be applied to the 
participant's account and will not

[[Page 290]]

be refunded. If a loan overpayment refund is returned as undeliverable, 
the TSP record keeper will attempt to locate the participant. If the 
participant does not respond within 60 days, the TSP will forfeit the 
overpayment refund to the Plan. The participant can claim the forfeited 
funds, although they will not be credited with TSP investment fund 
returns.
    (c) The initial payment on a loan is due on or before the 60th day 
following the loan issue date. Interest accrues on the loan from the 
date of issuance.
    (d) Subsequent payments are due at regular intervals as prescribed 
in the loan agreement, or most recent amortization, according to the 
participant's pay cycle.
    (e) If a payment is not made when due, the TSP will notify the 
participant of the missed payment and the participant must make up the 
payment in full. If the participant does not make up all missed payments 
by the end of the calendar quarter following the calendar quarter in 
which the first payment was missed, the TSP will declare the loan to be 
a taxable distribution in accordance with Sec.  1655.15. The 
participant's make-up payment must be in the form of a personal check or 
guaranteed funds.
    (f) Interest will accrue on all missed payments and will be included 
in the calculation of any taxable distribution subsequently declared in 
accordance with Sec.  1655.15. Interest will also accrue on payments 
missed while a participant is in nonpay status.