As we turn our attention to another episode of “All My Garnishments” there have been a number of developments aimed at keeping debt collectors from garnishing the economic stimulus funds that are now being deposited into the bank accounts of consumers nationwide.
On the Congressional level, a bill was introduced yesterday by Sen. Sherrod Brown [D-Ohio], the chairman of the Senate Banking Committee that would classify the funds being deposited into consumers’ bank accounts as if they were Social Security deposits, which are exempt from being garnished.
In a statement that is sure to raise the blood pressure of legitimate collectors across the country, Sen. Brown said, “We passed the American Rescue Plan to put money in people’s pockets so they can pay their bills, not to line the pockets of predatory private debt collectors. Our bill would mean American workers and their families don’t have to worry their stimulus checks will be gobbled up by financial predators, and the House should pass it immediately.” Predatory and predators in consecutive sentences. At least he could have tried to use different pejoratives to describe the industry.
At the state level, Maura Healey, the Attorney General of Massachusetts, said that any money that residents receive as part of the American Rescue Plan is to be treated as public assistance funds, which are exempt from garnishment or attachment by creditors. As if it was needed, Healey said in a statement that her guidance was intended to “put the debt collection industry on notice and to make sure consumers are aware of their rights under the law.”
In Virginia, Attorney General Mark Herring issued a statement that reminded everyone of a law that was passed last year when the original uproar over the possibility that consumers may lose their original stimulus checks to garnishment is still in effect and that any payments that are in the name of economic relief due to the COVID-19 pandemic are exempt from garnishment by collectors and creditors.
Finally, the Consumer Financial Protection Bureau issued a statement encouraging banks and debt collectors to allow stimulus payments to reach consumers. “In recent days, many financial industry trade associations in dialogue with the CFPB have said they want to work with consumers struggling in the pandemic,” said CFPB Acting Director Dave Uejio, in a statement. “Many of these organizations have told us they have begun or soon will take proactive measures to help ensure that consumers can access the full value of their stimulus payments. If payments are seized, many financial institutions have pledged to promptly restore the funds to the people who should receive them. We appreciate these efforts, which recognize the extraordinary nature of this crisis and the extraordinary financial challenges facing so many families across the country.”
Tune in tomorrow to see whether Marissa will admit her affair to Marcus, if Portia will survive her brain-heart-lung transplant, and what other states and lawmakers jump on the anti-garnishment bandwagon.