WASHINGTON – Leading financial services trade associations today wrote Congressional leadership requesting that Congress clarify that the CARES Act economic impact payments (also known as stimulus payments) are treated as benefits subject to the federal exemption from garnishment.
“America’s banks stand ready to provide full access to funds appropriated for the explicit purpose of helping families make ends meet. 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 exempt them from court-ordered garnishment to pay creditors. As a result, banks are obligated to treat them accordingly, which will impose a significant burden for some families facing unprecedented circumstances. We believe it is imperative that Congress make it clear that these payments are treated as benefits subject to the federal exemption from garnishment,” the associations wrote in the letter.
A copy of the letter, signed by American Bankers Association, Bank Policy Institute, Consumer Bankers Association, the Financial Services Forum, and The Clearing House is available here.