The American Bankers Association today joined a broad coalition of financial trade and consumer organizations in a letter to congressional leaders urging them to exempt the CARES Act economic impact payments from garnishment orders. While the CARES Act exempted these payments from offset for debts owed to federal and state agencies (except for child support), it failed to address court-ordered garnishments to pay creditors, the groups noted.
“Banks are obligated to comply with garnishment orders unless lifted by a court,” the groups emphasized. “We urge Congress to provide this certainty to ensure that American families are receiving these benefits as intended.”
They added that clarifying the treatment of EIPs could also encourage more consumers to provide their direct deposit information to the IRS, which would facilitate the use of electronic payments rather than digital checks—something ABA has advocated since the EIP program was first announced.
