Debt Collection Act of 1981

(Reported to Senate from the Committee on Finance with amendment, S. Rept. 97-287)

Debt Collection Act of 1981 - Amends the Privacy Act of 1974 to permit a Federal agency to disclose individual records to a consumer reporting agency.

Authorizes a Federal agency attempting to collect a claim under the Federal Claims Collection Act of 1966 to notify a consumer reporting agency that a person is responsible for a claim if: (1) the agency has determined that the claim is valid and overdue; (2) the agency has sent a written notice informing the person that a consumer reporting agency will be contacted, describing the information to be disclosed, and explaining the person's right to dispute the agency's claim; (3) the person has not agreed to repay or filed for review of the claim; (4) the agency, upon request, has reviewed the claim; and (5) the agency has obtained assurances that the consumer reporting agency complies with Federal laws governing the provision of consumer credit information. Requires the agency to notify the consumer reporting agency promptly concerning any change in the status or amount of the claim.

Prohibits the agency from disclosing to the consumer reporting agency information other than: (1) information necessary to identify the debtor; (2) the amount, status, and history of the claim; and (3) the name of the agency.

Directs Federal agencies to require any individual applying for credit or financial assistance, which may result in indebtedness to the Government, to furnish his or her social security number.

Authorizes an agency (including the United States Postal Service) to deduct installment payments from the pay of an employee or a member of the Armed Forces or Armed Forces Reserve to offset any debts owed the Government. Limits the amount deducted to 25 percent of the individual's disposable pay. Permits such deduction only after the agency has: (1) notified the individual of its intention to garnish his or her pay; and (2) provided the individual an opportunity to inspect its records, to review its determination of indebtedness, and to enter into a repayment agreement.

Makes murder or manslaughter of a Federal debt collector a Federal offense.

Amends the Internal Revenue Code to authorize the Secretary of the Treasury to disclose to a Federal agency: (1) information concerning the tax liability of a Federal loan applicant; and (2) the mailing address of a taxpayer for use by employees or agents of the agency in collecting or compromising a Federal claim. Permits an agency to disclose a taxpayer's address to a consumer reporting agency only to obtain a commercial credit report on the taxpayer. Requires agencies to establish and report to the Office of Management and Budget concerning certain safeguards to protect the confidentiality of addresses disclosed to agents.

Allows the Government to collect claims by administrative offset beyond the six year statute of limitations on actions brought by the Government for money damages.

Amends the Federal Claims Collection Act of 1966 to direct each agency to charge a minimum annual rate of interest on outstanding debts and to assess a penalty charge and handling costs on delinquent claims, except where another statute, statutorily mandated regulation, loan agreement, or contract either prohibits or explicitly fixes interest or penalty charges.

Declares that service of legal process brought for the collection of U.S. claims shall be accomplished in accordance with the Federal Rules of Civil Procedure or as directed by the court.

Requires the Director of the Office of Management and Budget to: (1) direct each agency with outstanding debts to submit to the Director and the Department of the Treasury an annual report on the status of the agency's loans and accounts receivable; and (2) report to Congress annually on the management of agency debt collection activities.

Authorizes the head of an agency to enter into a contract with any person for the collection of claims owed the United States. Requires such contract to include provisions subjecting the contractor to the Privacy Act of 1974 and other applicable Federal and State laws governing debt collection.