graph (d)(1) of this section. The individual shall be afforded a minimum of 30 days from the date of the notice to respond to it before information is reported to consumer reporting agencies.

(3) The Veterans Administration will defer reporting information to a consumer reporting agency if the individual disputes the existence or amount of any debt or requests waiver of the debt within the time limits set forth in paragraph (d)(2)(ii) of this section. The Veterans Administration will review any dispute and notify the individual of its findings. If the original decision is determined to be correct, or if the individual's request for waiver is denied, the Veterans Administration may report the fact of delinquency to a consumer reporting agency. However, the individual shall be afforded 30 days from date of the notice of the agency's determination to repay the debt.

(4) Nothing in this section affects an individual's right to appeal an agency decision to the Board of Veterans Appeals. However, information concerning the debt may be disclosed while an appeal is pending before the Board of Veterans Appeals.

(5) Upon request, the Veterans Administration will notify an individual— (i) Whether information concerning a debt has been reported to consumer reporting agencies;

(ii) of the name and address of each consumer reporting agency to which information has been released; and

(iii) of the specific information released.

A notice of the right to request this information will be sent with the notice described in paragraph (d)(1) of this section.

(e) Subsequent to disclosure of information to consumer reporting agencies as described in paragraph (c) of this section, the Veterans Administration shall:

(1) Notify on a monthly basis each consumer reporting agency concerned of any substantial change in the status or amount of indebtedness.

(2) Promptly verify any and all information disclosed if so requested by the consumer reporting agency concerned.

(f) In the absence of a different rule prescribed by statute, contract, or other regulation, an indebtedness is considered delinquent if not paid by the individual by the date due specified in the notice of indebtedness, unless satisfactory arrangements are made by such date.

(g) Notification shall be considered sufficient when effected by ordinary mail, addressed to the last known address, and such notice is not returned as undeliverable by postal authorities.

(h) The Privacy Act (5 U.S.C. 552a) does not apply to any contract between the Veterans Administration and a consumer reporting agency, nor does it apply to a consumer reporting agency and its employees. See 38 U.S.C. 3301(i). This paragraph does not relieve the Veterans Administration of its obligation to comply with the Privacy Act.

(i) The term "consumer reporting agency" means any person or agency which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties or to other consumer reporting agencies. The term "consumer reporting agency” shall also mean any person or agency which serves as a marketing agent under arrangements enabling third parties to obtain such information from consumer reporting agencies, or which obtain such information for the purpose of furnishing it to consumer reporting agencies. (38 U.S.C. 3301 (g), (i); 31 U.S.C. 952) [46 FR 62058, Dec. 22, 1981]

STANDARDS FOR COMPROMISE OF CLAIMS AUTHORITY: Sections 1.930 to 1.937 issued under 72 Stat. 1114; 38 U.S.C. 210.

SOURCE: Sections 1.930 to 1.937 appear at 32 FR 2614, Feb. 8, 1967, unless otherwise noted.

§ 1.930 Scope and application.

The standards contained in §§ 1.930 through 1.937 apply to the compromise by the Administrator of Veterans Affairs or his/her designee of claims of the Government which arise from

the activities of the Veterans Administration, do not exceed $20,000 exclusive of interest, have not been referred to the General Accounting Office or the Department of Justice, and do not arise out of an exception made by the General Accounting Office in the account of an accountable officer. The $20,000 limitation does not apply to loan guarantee indebtedness under 38 U.S.C., Chapter 37.

[32 FR 2614, Feb. 8, 1967, as amended at 48 FR 1056, Jan. 10, 1983]

§ 1.931 Inability to pay.

The Veterans Administration will attempt to compromise claims for less than the full amount when the debtor is clearly unable to pay the full amount within a reasonable time or the debtor refuses to pay in full and the Government appears unable to enforce full collection within a reasonable time. The compromise authority contained in §§ 1.930 through 1.937 will not be utilized to grant equitable relief denied under waiver authority. All compromise amounts will bear a reasonable relation to the amount realizable under enforced collection procedures considering the circumstances. Compromises payable in installments are discouraged. However, if payment of a compromise by installments is necessary, an agreement for the reinstatement of the prior indebtedness less sums paid thereon and acceleration of the balance due upon default in the payment of any installment should be obtained, together with security in the manner set forth in § 1.197, in every case in which this is possible. If the agency's files do not contain reasonably up-to-date credit information as a basis for assessing a compromise proposal such information may be obtained from the individual debtor by obtaining a statement executed under penalty of perjury showing the debtor's assets and liabilities, income and expense. Similar data may be obtained from corporate debtors by resort to balance sheets and such additional data as seems quired.

§ 1.932 Litigative possibilities.

re

The Veterans Administration will attempt to compromise claims when

there is a real doubt as to the Government's ability to prove its case in court for the full amount claimed either because of the legal issues involved or bona fide dispute as to the facts. The amount accepted in compromise will fairly reflect the probability of prevailing on the legal question involved, the probabilities with respect to full or partial recovery of a judgment having due regard to the availability of witnesses and other evidentiary support for the Government claim, and related pragmatic considerations. Proportionate weight will be given the court costs which may be assessed against the Government if it is unsuccessful in litigation, having regard for the litigative risks involved. Cf. 28 U.S.C. 2412, as amended by Pub. L. 89-507, 80 Stat. 308.

§ 1.933 Cost of collecting claim.

The Veterans Administration will attempt to compromise claims when the cost of collection does not justify enforced collection of the full amount. The amount accepted in compromise in such cases may reflect an appropriate discount for the administrative and litigative costs of collection, having regard for the time required to effect collection. The cost of collection normally will be a proportionately greatly factor in the settlement of small claims.

§ 1.934 Joint and several liability.

When two or more debtors are jointly and severally liable, the Veterans Administration will proceed against each for the full amount. Care will be exercised that compromise with any one such debtor does not release the agency's claim against the remaining debtors or establish a morally binding precedent limiting their liabilities.

§ 1.935 Settlement for a combination of

reasons.

The Veterans Administration may compromise specific claims for any combination of the reasons authorized in §§ 1.931 through 1.934.

§ 1.941 Suspension of collection activity.

Suspension of collection activity constitutes merely the temporary cessation of collection effort. The Veterans Administration will suspend collection activity on all claims where the debtor cannot be located after diligent effort and there is reason to believe that future collection action may be sufficiently productive to justify periodic review and action on the claim having consideration for its size and the amount which may be realized thereon. Collection action may be suspended temporarily on a claim when the debtor owns no substantial equity in realty and is unable to make payments on the Government's claim or effect a compromise thereof at the time but his future prospects justify retention of the claim for periodic review and

action and: (a) The applicable statute of limitations has been tolled or started running anew or (b) future collection can be effected by offset notwithstanding the statute of limitations. Suspension of collection activity as to a particular debtor will not defer the early liquidation of any security for the debt. Every effort will be made to locate missing debtors sufficiently in advance of the bar of any applicable statute of limitations to permit the timely filing of suit if such action is warranted. If the missing debtor has signed a confess-judgment note and is in default, referral of the note for entry of judgment will not be delayed because of his missing status.

§1.942 Termination of collection activity.

Termination of collection activity involves a final determination. Collection activity may be terminated on cases previously suspended. The Veterans Administration may terminate collection activity and consider closing the agency file on a claim which meets any one of the following standards:

(a) Inability to collect any substantial amount. It is clear that the Government cannot enforce collection of any significant sum from the debtor and future prospects for collection are remote.

(b) Inability to locate debtor. The debtor cannot be located, no security remains to be liquidated, the applicable statute of limitations has run, and the prospects of collecting by offset are too remote.

(c) Decease of debtor. The debtor is determined to be deceased and the Government has no prospect of collecting from his estate.

(d) Cost will exceed recovery. The cost of further collection effort is likely to exceed the amount recoverable.

(e) Claim legally without merit. Collection action should be terminated on a claim whenever it is determined that the claim is legally without merit.

(f) Claim cannot be substantiated by evidence. The Veterans Administration will terminate collection action on once asserted claims because of lack of evidence or unavailability of witnesses

§ 1.955 Regional Office Committees on Waivers and Compromises.

(a) Delegation of authority and establishment. (1) Sections 1.955 et seq. are issued to implement 38 U.S.C. 1820(a)(4) and 3102, 31 U.S.C. 951-953 and 5 U.S.C. 5584. The duties, delegations of authority and all actions required of the Committee on Waivers and Compromises, are to be accomplished under the direction of, and authority vested in, the Director of the regional office.

(2) There is established in each regional office, a Committee on Waivers and Compromises to perform the duties and assume the responsibilities delegated by §§ 1.956 and 1.957. The term "regional office", as used in

§ 1.955 et seq., includes VA Medical and Regional Office Centers and VA Centers where such are established.

(b) Committee on Waivers and Compromises (1) Composition. The Committee shall consist of a Chairperson and five members at regional offices having loan guaranty activities or a Chairperson and four members at other regional offices. Members shall be selected so that in each of the debt claims activities of compensation, pension, education, insurance, loan guaranty (at offices having such activities), and finance, there is at least one member with special competence. An alternate Chairperson and an unlimited number of alternate members may be designated and used in place of Committee member(s), or as panel members (see paragraph (c) of this section), whenever needed.

(2) Selection. The Director shall designate the employees to serve as Chairperson, members and alternates. Except upon specific authorization of the Chief Benefits Director, when workload warrants a full-time committee, such designation will be part-time additional duty upon call of the Chairperson.

(3) Control and staff. The Division Chief of the Fiscal activity is accountable for the administrative control of the Committee functions. The quality control of the Committee and its professional and clerical staff is the responsibility of the Chairperson.

(4) Overall control. The Controller is delegated complete management authority, including planning, policy formulation, control, coordination, supervision and evaluation of Committee operations.

(c) Panels. When a claim is properly referred to the Committee, the Chairperson shall ordinarily designate from members and/or alternates, a panel of three (of whom the Chairperson may be one), to consider and determine the action to be taken. One person from this panel shall be specially qualified in the program field in which the debt arose. If their panel decision is unanimous, it will be the Committee decision. Otherwise, the case will be decided by the entire membership of the Committee (i.e., either six or five persons as provided in paragraph (b)(1),

of this section) and the majority vote of the Committee shall determine the decision. In such cases the Chairperson shall not vote except when necessary on four-member committees to break a tie.

(d) Single signature authority. Where a request is for waiver of collection of a debt of $1,000 or less, exclusive of interest, the Chairperson shall designate from members and/or alternates one person, with special competence in the program area where the debt arose, to consider the question. His/her signature alone to the decision will suffice. In compromise cases, however, three person panels are always required regardless of the amount of the debt. (38 U.S.C. 210(c)(1))

[44 FR 59905, Oct. 17, 1979, as amended at 48 FR 1056, Jan. 10, 1983]

§ 1.956 Jurisdiction.

(a) The regional office Committees are authorized, except as to determinations under § 2.6(e)(4)(i) of this chapter where applicable, to consider and determine as limited in §§ 1.955 et seq., settlement, compromise and/or waiver concerning the following debts and overpayments:

(1) Arising out of operations of the Department of Veterans Benefits:

(i) Overpayment or erroneous payments of pension, compensation, dependency and indemnity compensation, burial allowances, plot allowance, subsistence allowance, education (includes debts from work study and education loan defaults as well as from other overpayments of educational assistance benefits) or insurance benefits, clothing allowance and automobile or other conveyance and adaptive equipment allowances.

(ii) Debts arising out of the loan program under 38 U.S.C. ch. 37 after liquidation of security, if any.

(iii) Such other debts as may be specifically designated by the Chief Benefits Director.

(2) Arising out of operations of the Department of Medicine and Surgery: (i) Debts resulting from services furnished in error (§ 17.62(a) of this chapter).