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TCH Supports Exempting Pandemic Stimulus Payments to American Families from Garnishment

TCH, together with BPI, the ABA, and other trade groups, submitted a comment letter to Congress to urge that future pandemic-related stimulus payments be exempt from otherwise legally binding garnishment orders. Stimulus payments provided for under the CARES Act were exempted from offset for debts owed to federal and state agencies, except in the case of child support, but were not exempted from court-ordered garnishment to pay creditors. As a result, banks were obligated to act accordingly, imposing a significant burden on certain families struggling with unprecedented circumstances. The comment letter submitted to Congress expresses TCH’s belief that pandemic-related stimulus payments to American families should be treated as benefits subject to the federal exemption from garnishment. Additionally, the letter notes that stimulus payments made by direct deposit could be coded to contain an exemption identifier indicating the payment is exempt from garnishment, something that cannot be done with payments made by paper check.

To read the full comment letter click here.