31 C.F.R. § 210.10

RDFI liability

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(a) Full liability. An RDFI shall be liable to the Federal Government for the total amount of all benefit payments received after the death or legal incapacity of a recipient or the death of a beneficiary unless the RDFI has the right to limit its liability under § 210.11 of this part. An RDFI shall return any benefit payments received after the RDFI becomes aware of the death or legal incapacity of a recipient or the death of a beneficiary, regardless of the manner in which the RDFI discovers such information. If the RDFI learns of the death or legal incapacity of a recipient or death of a beneficiary from a source other than notice from the agency issuing payments to the recipient, the RDFI shall immediately notify the agency of the death or incapacity. The proper use of the R15 or R14 return reason code shall be deemed to constitute such notice.

(b) Actual or Constructive Knowledge of Death. Actual or constructive knowledge, when used in reference to an RDFI's or agency's knowledge of the death or incapacity of a recipient or death of a beneficiary, means that the RDFI or agency received information, by whatever means, of the death or incapacity and has had a reasonable opportunity to act on such information or that the RDFI or agency would have learned of the death or incapacity if it had followed commercially reasonable business practices. For purposes of this subpart, an agency is presumed to have constructive knowledge of death or incapacity at the time it stops certifying recurring payments to a recipient if the agency:

(1) Does not re-initiate payments to the recipient; and

(2) Subsequently initiates a reclamation for one or more payments made to the recipient.

(c) Exception to liability rule. An RDFI shall not be liable for post-death benefit payments sent to a recipient acting as a representative payee or fiduciary on behalf of a beneficiary, if the beneficiary was deceased at the time the authorization was executed and the RDFI did not have actual or constructive knowledge of the death of the beneficiary.

(d) Time limits. An agency that initiates a request for a reclamation must do so within 120 calendar days after the date that the agency first has actual or constructive knowledge of the death or legal incapacity of a recipient or the death of a beneficiary. An agency may not reclaim any post-death or post-incapacity payment made more than six years prior to the date of the notice of reclamation; provided, however, that if the account balance at the time the RDFI receives the notice of reclamation exceeds the total amount of post-death or post-incapacity payments made by the agency during such six-year period, this limitation shall not apply and the RDFI shall be liable for the total amount of all post-death or post-incapacity payments made, up to the amount in the account at the time the RDFI receives the notice of reclamation and has had a reasonable opportunity to act on the notice (not to exceed one business day).

(e) Debit of RDFI's account. If an RDFI does not return the full amount of the outstanding total or any other amount for which the RDFI is liable under this subpart in a timely manner, the Federal Government will collect the amount outstanding by instructing the appropriate Federal Reserve Bank to debit the account utilized by the RDFI. The Federal Reserve Bank will provide advice of the debit to the RDFI.

[64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004; 85 FR 15721, Mar. 19, 2020]

Notes of Decisions

Cited in 6 cases, 1983–2019 · leading case: United States ex rel. Hendrickson v. Bank of Am., N.A., 343 F. Supp. 3d 610 (N.D. Tex. 2018).

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United States ex rel. Hendrickson v. Bank of Am., N.A., 343 F. Supp. 3d 610 (N.D. Tex. 2018). · cites it 3× “Pursuant to 31 C.F.R. § 210.10 (a), "An RDFI shall be liable to the Federal Government for the total amount of all benefit payments received after the death .”

Transactive Corp. v. United States of Am. & Robert E. Rubin, Sec'y of Treasury, 91 F.3d 232 (D.C. Cir. 1996). “, 31 C.F.R. § 210.10 . Treasury tries to dimmish the importance of its own regulation by arguing that we should not think that the definition of “disburse” for a particular regulatory subpart necessarily articulates Treasury’s definition of what constitutes disbursement within…”

Beauchesne v. Nimmo, 562 F. Supp. 250 (D. Conn. 1983). · cites it 3× “Financial organizations are provided specific instructions in 31 C.F.R. § 210.10 , entitled “Collection Procedures”, which provides, in pertinent part: “(a) For each type of recurring payment, the Department of the Treasury shall send a written notice (‘first notice’) to the…”

Dockstader v. Miller, 719 F.2d 327 (10th Cir. 1983). · cites it 4× “The trial court recognized that the instructions contained in 31 C.F.R. § 210.10 (a), Form RO-133, and section 4 of the Treasury Department’s Green Book apparently do direct financial institutions to debit the accounts of deceased recipients in the amount erroneously paid.”

Breault v. Heckler, 591 F. Supp. 308 (D. Conn. 1984). · cites it 3× “31 C.F.R. § 210.10 (e); Treasury Form RO-133 and Treasury’s "Green Book” provide similar instructions.”

Edward Hendrickson v. Bank of Am., N.A. (5th Cir. 2019). “See 31 C.F.R. § 210.10 (a) (2019) (“A[ ] [bank] shall return any benefit payments received after [it] becomes aware of the death or legal incapacity of a recipient or the death of a beneficiary, regardless of the manner in which the [bank] discovers such information.”

— 31 C.F.R. § 210.10(a) — 1 case

Breault v. Heckler, 591 F. Supp. 308 (D. Conn. 1984). “31 C.F.R. § 210.10 (e); Treasury Form RO-133 and Treasury’s "Green Book” provide similar instructions.”

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