Treasury investigating whether banks and debt collectors can seize your coronavirus stimulus checks – The Sun
THE U.S. Treasury Department is reviewing if banks and debt collectors should be allowed to seize your stimulus checks when they hit your accounts.
Due to a loophole in the law, debt collectors and banks have been able to collect on the stimulus checks sent out to Americans.
Several states have blocked the collection of stimulus checks amid the coronavirus pandemic – but it is now under review by the federal government if it should be allowed, The Washington Post reported.
The Treasury Department's legal counsel is investigating if banks or private collectors should be allowed to garnish the emergency checks, meant to provide financial relief to Americans as more than 95 percent of the nation is under lockdown, a source told The Washington Post.
It has yet to be finalized if it will be allowed for individuals' stimulus checks to be garnished.
The stimulus checks – part of a $2.2 trillion coronavirus relief package passed by Congress and signed in late March by President Trump – began to roll out to Americans last week.
Several state's governors – including Illinois, Washington and Oregon – have made it illegal for the stimulus checks to be seized to cover debts, Forbes reported.
Oregon Gov. Kate Brown issued an order on Friday that makes it illegal for debt collectors or banks to seize the stimulus money.
This ensures that the money goes directly into the hands of the Americans.
“Many Oregonians, through no fault of their own, are struggling to pay their bills, their rent, or even buy essentials like groceries and prescription drugs,” Brown said in a statement.
“These recovery checks were meant to provide relief, not reward debt collection agencies for preying on Oregonians who have lost their livelihoods due to the COVID-19 pandemic," she added.
As some people reported their stimulus checks were being garnished, others reported various problems upon the rollout.
Some people reported their stimulus checks were being sent to the wrong account.
Others reported that the emergency money was being sent to people who have died.
When expecting only around a thousand dollars, two people – one in Florida and one in Indiana – reported seeing more than $8 million mistakenly deposited into their accounts.
As stimulus checks began to roll out, the U.S. Department announced last week that an additional 5.2 million Americans filed for unemployment just seven days.
Over the last four weeks alone, more than 22 million Americans have filed jobless claims amid the virus crisis.
There's a possibility more – and bigger – stimulus checks could be coming to Americans soon.
Two Democrats last week introduced The Emergency Money for the People Act, which would give people in the U.S. $2,000 per month during the pandemic if they make less than $130,000 per year.
A $349 billion fund as a part of the CARES Act coronavirus relief package that gave money for a Paycheck Protection Program to small businesses ran dry last week – just two weeks after it opened.
Democrats and Republicans have been in a standoff over passing an additional portion of funding for small businesses.
Republicans put forward a proposal for an additional $250 billion in funds for small businesses – but Democrats demanded an equal amount go toward hospitals and local governments.
Treasury Secretary Steven Mnuchin said yesterday that he hopes a deal – totaling $450 billion – will be ready by midweek to allow for additional funds, The Associated Press reported.
“I think we’re very close to a deal today. I’m hopeful that we can get that done,” Mnuchin said.
Mnuchin said the new deal would give $300 billion to small businesses, along with $75 billion to hospitals and $25 billion more for COVID-19 testing.
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