NAFCU, trades ask Congress to address garnishment concerns in COVID package

As the House prepares to advance the next round of coronavirus relief, NAFCU joined with several other financial institution and consumer groups to ask Congress to include language to protect economic impact payments (EIPs) from garnishment.

“The economic impact payments are intended to help families purchase food and other necessities to make ends meet,” the groups wrote. “Many people were already struggling prior to the coronavirus crisis and millions have now been laid off or had their hours cut.

“…We believe it is imperative that Congress ensure that these next stimulus payments are treated as ‘benefits’ subject to the federal exemption from garnishment. Otherwise, the families that most need this money—those struggling with debt and whose entire bank accounts may be frozen by garnishment orders—will not be able to access their funds,” they argued.

Without language to protect the EIPs from garnishment, depository institutions are obligated to comply with court orders and pay creditors who attempt to garnish and freeze bank accounts. While the CARES Act did not provide this protection for the first round of EIPs, the Consolidated Appropriations Act (CAA) did include language to protect the second round of EIPs from garnishment.


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