As Congress prepares to pass the $1.9 trillion COVID-19 relief bill—which includes another round of $1,400 economic impact payments—the American Bankers Association joined a coalition of financial and consumer groups urging lawmakers to shield these EIPs from assignment and garnishment. In a letter to House and Senate leaders, the groups emphasized that absent immediate legislation, banks and other financial institutions are legally required to comply with court orders.
“We believe it is imperative that Congress ensure that these next stimulus payments are treated as ‘benefits’ subject to the federal exemption from garnishment,” the groups wrote. “Otherwise, the families that most need this money—those struggling with debt and whose entire bank accounts may be frozen by garnishment orders—will be not be able to access their funds.”
The groups urged lawmakers to “quickly pass standalone legislation addressing garnishment to ensure that American families will receive these benefits as intended to fulfill our common goal of protecting these payments from garnishment within the practical realities of existing financial institution systems.”