The next round of Economic Impact Payments should be protected from assignment and garnishment, CUNA and other organizations wrote this week to Congressional leaders. Legislation, the American Rescue Plan Act of 2021 is currently being considered by Congress.
“We believe it is imperative that Congress ensure that these next stimulus payments are treated as “benefits” subject to the federal exemption from garnishment. Otherwise, the families that most need this money—those struggling with debt and whose entire bank accounts may be frozen by garnishment orders—will be not be able to access their funds. This group includes very low-income families with children, people who have been disconnected from work opportunities for a long period, and many low-income adults now raising children in their homes.”
The letter notes that the initial round of EIPs from the CARES Act were not exempt from court-ordered garnishments, which imposed significant burdens on some families, especially those in communities of color.
The organizations note that by adding such protections into the American Rescue Plan Act of 2021 would ensure families receive the benefits as intended.