Sec. 2. Limitations on authority of the Secretary of Veterans Affairs to recover amounts owed by veterans to the United States
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Section 5314 of title 38, United States Code, is amended as follows: In subsection (a)— by inserting before Authority To offset; limitations.—
(1)Subject to ; by striking subsections
(b)and
(d)of this section and and inserting paragraphs
(2)and
(3)of this subsection, subsections
(b)and
(d)of this section, and ; and by adding at the end the following new paragraph: The Secretary may make a deduction under paragraph
(1)only if— the indebtedness to the United States described in that paragraph— is the result of an error, a misrepresentation, or fraud by the person described in that paragraph; in the case of an error by the person described in that paragraph, is less than five years old; is not in dispute under regulations prescribed pursuant to subsection (d)(2)(A); and exceeds $2,500; and the Secretary determines that the amount of the indebtedness exceeds the cost to the Department to recover the indebtedness. The Secretary may not make a deduction under paragraph
(1)to a payment under chapter 11 or 15 of this title that exceeds the lesser of— 25 percent of the payment; and a percentage that the Secretary determines is the greatest percentage that would not cause a hardship to the recipient. . In subsection (b)— by striking Deductions may not be made and inserting ; Notice required.— No deduction may be made by striking unless the Secretary and inserting until after ; by amending paragraph
(1)to read as follows: the Secretary has made reasonable efforts to notify the person of the person's right— to dispute the existence or amount of such indebtedness under regulations prescribed pursuant to subsection (d)(2)(A); to request a waiver of such indebtedness under section 5302 of this title; and in the case of a payment under chapter 11 or 15 of this title, to request the Secretary make a determination under subsection (a)(3)(B); ; and in paragraph (2), by inserting the Secretary before has made ; and by amending paragraph
(3)to read as follows: the day that is 90 calendar days after the day the Secretary sends notice to the person of the indebtedness and of the proposed deduction. . In subsection (c), by inserting before Inapplicability of statutes of limitations to administrative actions.— Notwithstanding . In subsection (d)— by inserting before Regulations .—
(1)The Secretary ; and by adding at the end the following new paragraph: The regulations under paragraph
(1)shall include administrative processes by which a person described in paragraph
(1)of subsection
(a)may— dispute the existence or amount of indebtedness described in that paragraph; and request that the Secretary make a determination under paragraph (3)(B) of such subsection. The regulations under paragraph
(1)shall direct the Secretary to ensure that each dispute under paragraph (2)(A) is adjudicated not later than 120 days after the initiation of such dispute. The regulations under paragraph
(1)may not permit the Secretary to submit to any debt collector (as defined in section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a )) any debt in dispute under paragraph (2)(A). Nothing in this subsection shall be construed to prohibit a person from seeking relief from a court of competent jurisdiction. . Section 5315 of such title is amended— in subsection (b)(1), in the first sentence by striking or
(B)and inserting
(B)for any period during which the existence or amount of the indebtedness is being disputed under regulations prescribed pursuant to section 5314(d) of this title, or
(C); and in subsection (c)— by inserting
(1)before The administrative ; and by adding at the end the following new paragraph: No administrative costs may be charged under this section with respect to indebtedness described in subsection
(a)while the existence or amount of the indebtedness is being disputed under section 5314(d) of this title. . Section 5316(a) of title 38, United States, is amended— in paragraph (1), by striking paragraphs
(2)and
(3)and inserting paragraphs (2), (3), and
(4); by redesignating paragraph
(3)as paragraph (4); and by inserting after paragraph
(2)the following new paragraph (3): No suit may be filed under this section to recover any indebtedness more than five years old. . Chapter 53 of such title is amended by adding at the end the following new section: In any case in which the Secretary finds that the Department has submitted erroneous information to a consumer reporting agency about the indebtedness of any person who has been determined by the Secretary to be indebted to the United States by virtue of the participation of that person in a benefits program administered by the Secretary, the Secretary shall— instruct the consumer reporting agency to remove such erroneous information from the consumer report of such person or take such other action as may be required to ensure that such erroneous information is not included in the report of such person; and transmit to the consumer reporting agency such information as the consumer reporting agency may require to take such appropriate actions. In any case in which the Secretary finds that a debt collector acting on behalf of the Department has submitted erroneous information to a consumer reporting agency about the indebtedness of any person who has been determined by the Secretary to be indebted to the United States by virtue of the participation of that person in a benefits program administered by the Secretary, the Secretary shall instruct the debt collector to request the consumer reporting agency remove such erroneous information from the consumer report of such person or take such other action as may be required to ensure such erroneous information is not included in the report of such person. Not later than 60 days after the date on which the Secretary issues an instruction under subsection (a)(1) or
(b)with respect to a person, the Secretary shall notify the person that the Secretary issued such instruction. In this section: The terms consumer report and consumer reporting agency have the meanings given such terms in section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a ). The term debt collector has the meaning given such term in section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a ). . The table of sections at the beginning of chapter 53 of such title is amended by adding at the end the following new item: 5320. Correction of erroneous information submitted to consumer reporting agencies. . The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply with respect to deductions made under section 5314 of such title, administrative costs under section 5315 of such title, and suits filed under section 5316 of such title on or after such date.
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Sec. 2
Limitations on authority of the Secretary of Veterans Affairs to recover amounts owed by veterans to the United States
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