Financial, Consumer Groups Urge Yellen to Shield EIPs from Garnishment

As Congress today passed the $1.9 trillion COVID-19 relief bill—which includes an additional round of economic impact payments for eligible taxpayers—the American Bankers Association joined a coalition of financial and consumer advocacy groups urging Treasury Secretary Janet Yellen to support standalone legislation to ensure that these payments are shielded from assignment and garnishment.

The groups called for immediate legislative action, noting that if Congress does not act, banks and other financial services providers will be legally required to comply with court ordered garnishments. “It is simple to code the payments as exempt, and 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 not be able to access their funds.”