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Wyden, colleagues intro bill to prevent garnishment of relief payments

U.S. Capitol

WASHINGTON (KTVZ) -- Sen. Ron Wyden said Wednesday he has introduced a bipartisan bill that would protect recovery payments provided in the recent CARES Act pandemic response legislation from garnishment by private debt collectors.

“This is a once-in-a-lifetime economic crisis. Relief was intended for struggling families, not predatory debt collectors,” said Wyden, ranking member of the Senate Finance Committee. “Our legislation would ensure help gets to the folks who need it to pay their bills.”

Under Section 2201 of the CARES Act, Congress provided for “recovery rebates” of up to $1,200 for qualifying individuals, along with an additional $500 per dependent child, to mitigate the financial blow of COVID-19 on our families and economy.

To ensure that American families receive the full amount of this intended relief, the CARES Act does not allow for the payment to be reduced, or “offset,” for past tax debts or other debts owed to federal or state governments.

However, CARES Act payments are not protected from being garnished by private debt collectors. As a result, many families have not received the payments that they were depending on.

This bill would ensure that the CARES Act payments go to helping American families, not debt collectors:

·        For any electronic payments, such as direct deposit, the bill directs the Treasury Department to encode payments so that banks can identify and protect these payments from being garnished by debt collectors;

·        For other payments, such as checks, the bill allows individuals to request that their banks or other financial institution protect the payments from being garnished by debt collectors and authorizes the financial institutions to do so.

Full text of the legislation can be found HERE.

In addition to Wyden, others introducing the bill are Sens. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs; Senate Finance Committee Chairman Chuck Grassley (R-Iowa); and Sen. Tim Scott (R-S.C.)

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