The American Bankers Association, BPI, Consumer Bankers Association, Financial Services Forum and The Clearing House wrote a joint letter to congressional Leadership on April 15, requesting that Congress clarify that the CARES Act economic impact payments (also known as stimulus payments) are treated as benefits subject to the federal exemption from garnishment.
“America’s banks stand ready to provide full access to funds appropriated for the explicit purpose of helping families make ends meet. Under the CARES Act, Congress exempted these payments from offset for debts owed to federal and state agencies, except in the case of child support, but did not exempt them from court-ordered garnishment to pay creditors. As a result, banks are obligated to treat them accordingly, which will impose a significant burden for some families facing unprecedented circumstances. We believe it is imperative that Congress make it clear that these payments are treated as benefits subject to the federal exemption from garnishment,” the associations wrote in the letter.
Additionally, the American Bankers Association, BPI, the Consumer Bankers Association and the Credit Union National Association responded to an inquiry from members of the Senate on April 17, reiterating the importance of Congressional clarity regarding court-ordered garnishments and outlining the extraordinary measures BPI members are taking to provide quick relief to customers, including waiving long-standing policies, implementing measures to serve the unbanked and overlooking negative account balances so that customers receive the full $1,200 stimulus payment.