According the "Federal Garnishment Calculator" in BOL Tools, if there is a protected amount, the "garnishment notice" is required. However, the 31 CFR 212.7 says that the notice is required IF "1. A covered Federal benefit payment was directly deposited into an account during the lookback period; 2. The balance in the account on the date of account review was above zero dollars and the financial institution established a protected amount; and 3. There are funds in the account in excess of the protected amount."

Should the model notice still be used when the account balance is less than the protected amount? The tool shows that it does, but that seems to be in excess of the regulatory requirement.

Your are correct that the tool calls for the bank garnishee to provide the prescribed notice even if there are no funds in the account in excess of the protected amount, and therefore no funds are frozen in or taken from the account in response to the gernishment order. You are also correct that the regulation does not required the notice if there are no funds in the account in addition to the protected amount.

However, some banks have elected to provide the notice when conditions 1 and 2, but not condition 3, have been met, to inform the depositor of the garnishment order and to assure the depositor that no funds were frozen or removed from the account(s).