The Senate today unanimously passed an American Bankers Association-advocated bill that would exempt the CARES Act economic impact payments from garnishment orders. While the March CARES Act exempted these payments from being offset for debts owed to federal and state agencies (except for child support), it did not address court-ordered garnishments to pay creditors.
Earlier this year, ABA joined a broad coalition of financial trade and consumer organizations urging this action. “Banks are obligated to comply with garnishment orders unless lifted by a court,” the groups emphasized in an April letter. “We urge Congress to provide this certainty to ensure that American families are receiving these benefits as intended.”
Under the legislation — which must still be passed by the House and signed into law — extends protections against bank garnishment to EIPs that are very similar to how current law treats garnishment of Social Security benefits. The bill includes a continued exception for child support enforcement orders.