The American Bankers Association today joined with twelve consumer groups and banking industry organizations in supporting a bipartisan bill that would prevent CARES Act economic impact payments from being subject to garnishment by private debt collectors. The bill was introduced by Sens. Chuck Grassley (R-Iowa), Ron Wyden (D-Ore.), Sherrod Brown (D-Ohio) and Tim Scott (R-S.C.).
While the CARES Act exempted EIPs from offset for debts owed to federal and state agencies, it failed to exempt them from court-ordered garnishment to pay creditors, the groups noted. “As a result, banks have been obligated to treat them accordingly, which has imposed a significant burden for some families facing unprecedented circumstances,” they noted.
“America’s banks stand ready to provide full access to funds appropriated for the explicit purpose of helping families make ends meet during these difficult times, but need Congress to move forward with this legislation to enable them to do so,” the groups added. “Providing this certainty would ensure that American families receive these benefits as intended.”