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This bill would stop the Small Business Administration from taking Social Security payments from certain people to repay loans that were fraudulently taken out in their names. It applies when a person is the victim of identity theft and has told the agency using the public reporting process. If the agency decides the person was not actually a victim of identity theft, the protection would not apply. The bill also tells the agency to update its notice rules so people are clearly told how to report identity theft.
- The protection covers Social Security benefits for repayment of certain small business loans that were made in someone’s name without their permission.
- The rule applies only when the person has reported the identity theft to the Small Business Administration through its public process.
- The Small Business Administration would have 30 days after the law takes effect to update its notice rules with information on how to report identity theft.
- The bill covers some loans made under the Small Business Administration’s regular loan programs, including certain COVID-19 response loans.
Official Summaries
Beat Bad Bureaucrats Act
This bill prohibits the Small Business Administration (SBA) from garnishing Social Security payments to victims of identity theft on account of certain delinquent SBA loans obtained fraudulently during the COVID-19 pandemic.
Specifically, the SBA may not garnish an individual’s Social Security payments related to a covered loan if (1) the individual’s name was used to fraudulently obtain the loan, and (2) the individual has reported the identity theft to the SBA. Under the bill, covered loans are Disaster Loans granted in response to COVID-19 between January 31, 2020, and December 31, 2021 (e.g., Economic Injury Disaster Loans) and loans granted under the Paycheck Protection Program. The prohibition on garnishment does not apply if the SBA determines that an individual is not a victim of identity theft.
Further, the SBA must post instructions on how to report identity theft on its public website and include them in the written notice provided to delinquent borrowers before garnishing their pay.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 886 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 886
To prohibit the Administrator of the Small Business Administration from
garnishing social security benefits with respect to certain named
individuals of covered loans who are victims of identity theft, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 31, 2025
Mr. Rulli (for himself, Mr. Graves, and Mr. Webster of Florida)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To prohibit the Administrator of the Small Business Administration from
garnishing social security benefits with respect to certain named
individuals of covered loans who are victims of identity theft, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Beat Bad Bureaucrats Act''.
SEC. 2. PROTECTION OF SOCIAL SECURITY BENEFITS FROM GARNISHMENT IN
CERTAIN CASES OF IDENTITY THEFT.
(a) In General.--Notwithstanding section 3716(c)(3)(A)(i) of title
31, United States Code, the Administrator may not, with respect to a
covered loan, garnish payments made to the named individual of such
covered loan under section 202 of the Social Security Act (42 U.S.C.
402 et seq.) for the purposes of repayment of such covered loan.
(b) Exception.--Subsection (a) does not apply if the Administrator
determines that the named individual is not a victim of identity theft.
(c) Revision of Rule.--Not later than 30 days after the date of the
enactment of this Act, the Administrator shall revise section
140.11(e)(1) of title 13, Code of Federal Regulations, to add to the
list of notice requirements in such section information about how to
report identity theft to the Administrator.
(d) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(2) Covered loan.--The term ``covered loan'' means--
(A) a loan made under paragraph (36) or (37) of
section 7(a) of the Small Business Act (15 U.S.C.
636(a)); or
(B) a loan made under section 7(b) of such Act (15
U.S.C. 636(b)) in response to COVID-19 during the
covered period (as defined in section 1110(a) of the
CARES Act (15 U.S.C. 9009).
(3) Named individual.--The term ``named individual'' means
an individual--
(A) under whose name a covered loan was
fraudulently made; and
(B) that has notified the Administrator, using the
procedure posted on a public website of the Small
Business Administration, that such individual is a
victim of identity theft with respect to such covered
loan.
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