173.115. Defaulted loans--wage withholding orders, issued when, maximum amount, effect--statement of claim, rights of borrower--hearing, procedure, order to pay debt, judicial review--employer duties,
Defaulted loans--wage withholding orders, issued when, maximum amount,effect--statement of claim, rights of borrower--hearing,procedure, order to pay debt, judicial review--employer duties,liabilities, immune, when--discharge of employee prohibited when,penalty--service of process--rulemaking.
173.115. 1. After the department has paid a loss on adefaulted loan and has entered a statement of claim in which itdetermines and sets forth the existence, nature and amount of themoney due it by the defaulting borrower and a proposed paymentschedule, the department may issue an order directing anyemployer of the borrower to withhold or pay over to thedepartment money due or to become due to the department.
2. Before issuing the order as provided in subsection 1 ofthis section, the department shall serve on the borrower thestatement of claim and shall inform the borrower that thedepartment intends to initiate proceedings to collect the debtthrough deductions from earnings. The department shall alsoprovide a copy of this section or an explanation of theborrower's rights under this section.
3. The department shall provide the borrower with anopportunity to inspect and copy records related to the defaultedloans.
4. The department shall provide the borrower with theopportunity to enter into a written agreement with the departmentunder terms agreeable to the department to establish a schedulefor the repayment of the debt.
5. The department shall provide the borrower with theopportunity to have a hearing before an impartial hearing officerappointed by the department but who is not under the control orsupervision of the board or department. The procedures for thehearing shall be the same as those for contested cases underchapter 536, RSMo. Upon the borrower's filing of a request for ahearing in compliance with the rules of the board, the departmentshall stay the commencement of collection proceedings for thedebt described in the statement of claim until the departmentissues an order provided for in subsection 6, 7, or 8, of thissection.
6. At the earliest practicable date but not later than sixtydays after the filing of the request for the hearing, the hearingofficer shall file with the department his written decision whichstates specifically his findings in regard to those matters setforth in the department's statement of claim. The hearingofficer shall also determine and include in his decision theterms of the repayment schedule which shall be the same as thatset forth by the department in its statement of claim unless hefinds no good cause to enter that schedule. Upon receipt of thehearing officer's decision, the department shall issue an orderto pay debt which adopts the findings in the decision as to theexistence, nature and amount of the debt and as to the repaymentschedule.
7. When a borrower properly requests a hearing under theboard's rules and when the hearing officer does not issue adecision within sixty days of the department's having receivedthe request for the hearing, the department shall issue an orderwithdrawing the statement of claim and serve it upon the borrowerwith a copy of this subsection. After such an order is entered,the department shall not use the provisions of this section inregard to the loans set forth in the statement of claim, but mayuse any other remedy provided by law to recover the moneys owedthe department. The order issued by the department shall nothave the effect of precluding any other administrative orjudicial tribunal from deciding any claim brought by thedepartment or other party against the borrower or from decidingany factual or legal issue relevant to such claim.
8. When a borrower does not make a proper timely request fora hearing, the department may issue and serve on the borrower anorder to pay debt which contains as its provisions the content ofthe statement of claim including the proposed repayment schedule.
9. The borrower may seek judicial review of any order to paydebt under sections 536.100 to 536.140, RSMo.
10. Upon issuing an order to pay debt, but not less thanthirty days after the statement of claim was served on theborrower, the department may issue an order to withhold earningswhich directs any employer of the borrower to withhold and payover to the department money due or to become due the borrower.The employer shall withhold from the earnings the amountspecified in the order, except that the total amount withheldshall not exceed ten percent of the borrower's earnings afterdeduction from those earnings of any amount required by law to bewithheld. When the borrower voluntarily makes a written requestthat money due or to become due him be withheld or applied to thedebt or that more than the ten percent maximum be withheld fromhis earnings, the employer shall comply with that request as ifso ordered by the department.
11. Subject to the provisions of section 454.505, RSMo, anorder to withhold earnings shall have the same force and effectin regard to the employer as any other garnishment.
12. No employer or other payor who complies with an order towithhold earnings shall be liable to the borrower, or to anyother person claiming rights derived from the borrower, forwrongful withholding. An employer who fails or refuses towithhold or pay the amounts as ordered under this section shallbe liable to the department in an amount equal to the amountwhich became due the department during the relevant period andwhich, under the order, should have been withheld and paid over.
13. An employer shall not discharge, refuse to hire orotherwise discipline an employee as a result of an order towithhold and pay over certain money authorized by this section.Any employer who does so is guilty of an infraction.
14. Service on the borrower or on the employer pursuant tothis section or pursuant to rules promulgated under this sectionmay be made on the borrower or employer, respectively or on otherparty in the manner provided for service of process in a civilaction by a duly authorized process server appointed by thedepartment, or by certified mail, return receipt requested, tothe borrower's last known address or to the employer's address.The department may appoint any disinterested party, including,but not necessarily limited to, employees of the department, toserve such process. For purposes of this section, a borrower oran employer who does not accept receipt of service by certifiedmail or a borrower who has not provided the department his new orcorrect address is deemed to have been served as of the date onwhich the certified mail is mailed.
15. The board may promulgate rules to carry out theprovisions of this section, including, but not limited to, rulespertaining to proceedings before the hearing officer and beforethe department and rules pertaining to procedures to be followedby employers to comply with the order to withhold and pay overearnings.
(L. 1988 H.B. 1456)