Read CFPB’s Statement regarding allowing Stimulus Payments to Reach Consumers here. Also, read CFPB’s Consumer Advisory regarding Stimulus Payments here.
- Source: consumerfinance.gov
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The Consumer Financial Protection Bureau (CFPB) issued a statement to Financial Institutions and Debt Collectors advocating for consumers to receive the stimulus payments that were intended to go directly to qualifying Americans as a result of the Coronavirus Pandemic. Concurrently, the CFPB issued an advisory to consumers who think their financial institution may have taken part of their Economic Impact Payment (EIP) funds.
EIPs are part of the American Rescue Plan. For some consumers, EIP payments are in jeopardy of being intercepted by debt collectors and financial institutions to go towards outstanding debts owed by the consumers. Some financial institutions have offered temporary credits to ensure the bank does not use right of offset against stimulus funds to resolve overdrafts or past due payments. Others have committed to reverse the receipt of any automatic garnishments or seizures by the institutions to ensure that the much-needed stimulus payments reach the consumers. These institutions agree that consumers should decide the most appropriate use of the relief aid given.
Given that the intended purpose for the EIP funds was to help families struggling as a result of the pandemic, protection measures need to be in place to ensure that those funds are available to families. Therefore, the CFPB is partnering with financial trade associations to address possible issues that may arise from debt collection practices related to stimulus payments. In its Supervisory Highlights, Winter 2021, the CFPB warned that some states prohibit financial institutions from using government benefits, including EIPs and unemployment insurance benefits, to satisfy garnishments, judgments, or rights of setoffs.
The ultimate goal is to ensure that the Economic Impact Payment funds are available to help the families who need the aid to take care of economic hardship brought on by the pandemic.