Consumer Groups & Bank Associations Urge Congress To Protect COVID19 Checks From Garnishment

Yesterday, U.S. PIRG joined leading consumer groups and bank trade associations in a joint letter urging Congress at the soonest possible opportunity to clarify that economic impact payments responding to this public health emergency are exempt from otherwise legally binding garnishment orders.

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Ed Mierzwinski
Senior Director, Federal Consumer Program

Author: Ed Mierzwinski

Senior Director, Federal Consumer Program

202-461-3821

Started on staff: 1977
B.A., M.S., University of Connecticut

Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.

Yesterday, U.S. PIRG joined leading consumer groups and bank trade associations in a joint letter urging Congress at the soonest possible opportunity to clarify that economic impact payments responding to this public health emergency are exempt from otherwise legally binding garnishment orders. The extremely rare joint letter was coordinated by the National Consumer Law Center, which has been sounding the alarm for weeks that consumers could lose their critical COVID19 stimulus checks to garnishment under existing court orders. As NCLC explains in a release: "The groups noted that under the CARES Act, Congress exempted these payments from offset for debts owed to federal and state agencies, except in the case of child support, but did not address court-ordered garnishments to pay creditors."

As the letter explains further:

“While financial institutions and even many debt collectors and debt buyers believe that the payments should be exempt from garnishment orders, some creditors have continued to attempt to garnish and freeze bank accounts. Banks are obligated to comply with garnishment orders unless lifted by a court. Yet many consumers do not know that they may have a legal defense to those orders under state exemption laws or for other reasons, and the crisis has also made it difficult to impossible to access attorneys or the courts – presenting due process issues. The lack of clear, self-executing protection for the stimulus payments imposes a significant burden for some families facing unprecedented circumstances."

Members of Congress, on a bi-partisan basis, have been urging Treasury Secretary Mnuchin to do more to protect stimulus checks, as Senators Sherrod Brown (D-OH) and Josh Hawley (R-MO) recently asked:

“If Treasury fails to take action, the CARES Act direct payments are at risk of being seized by debt collectors. That is not what Congress intended. We came together to pass the CARES Act to help American families pay for food, medicine, and other basic necessities during this crisis. To carry out Congress’s intent and ensure that American families receive the help they need, we ask that you immediately exercise your authority to protect these payments from private debt collectors.”

You can learn more about PIRG efforts to respond to the crisis here. The page includes links to our work ranging from our support for expanded access to testing and ventilators to our latest consumer financial tips. This NCLC page includes major consumer protections announced by Congress, federal, state and local  agencies and businesses to protect consumers, including other actions against garnishment.


Photo credit: Sarawut Chainawarat via shutterstock

Ed Mierzwinski
Senior Director, Federal Consumer Program

Author: Ed Mierzwinski

Senior Director, Federal Consumer Program

202-461-3821

Started on staff: 1977
B.A., M.S., University of Connecticut

Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.