(FinancialHealth.net) – Millions of Americans will receive Economic Impact Payments from the government this week. The Internal Revenue Service (IRS) started sending payments via direct deposit on April 11. Unfortunately, some citizens may not get all of or any of their money.
When Congress passed the CARES Act, the COVID-19 aid bill, they prevented the government from seizing stimulus payments. People who owe student loans or back taxes won’t have to worry about Uncle Sam taking their cash. Only those who owe back child support are exceptions. Well, that’s what everyone thought anyway.
On April 14, Forbes reported America’s biggest banks — US Bank, Wells Fargo, Citibank and Bank of America — have not ruled out snatching the funds for the unpaid debts people owe.
So here's my scoop: banks have been given the green light by regulators to take the $1,200 CARES Act payments and use them to offset an individual's existing debts. https://t.co/by1oQ1uoJl
— David Dayen (@ddayen) April 14, 2020
The American Prospect magazine published audio of an alleged meeting between banks and Assistant Commissioner for Payment Management at US Department of the Treasury, Bureau of the Fiscal Service, Ronda Kent. During the meeting Kent tells the room the CARES Act doesn’t prevent the financial institutions from taking the deposits for outstanding customer debt.
On April 13, 25 attorneys general asked Treasury Secretary Mnuchin to prevent private debt collectors from taking the money from Americans in need. It would be infuriating if this happened to citizens who are relying on the emergency aid to get them through this crisis. Hopefully, the federal government steps in and prevents it from happening.
~Here’s to Your Financial Health!
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