The Senate on Thursday passed bipartisan legislation that would prevent coronavirus relief payments from being seized by banks and debt collectors.
The Senate passed the bill unanimously.
Legislation passed by Congress in March, known as the CARES Act, authorized payments for most Americans of up to $1,200 per adult and $500 per child. The CARES Act prevented the reduction of payments due to unpaid taxes or other debts owed to state and local governments.
However, that hasn’t stopped private debt collectors from seizing payments. The bill passed by the Senate on Thursday would protect stimulus payments from garnishment by banks, the same way Social Security payments are protected from garnishment.
“This is a common-sense measure that will ensure that Congress’ $1,200 in Economic Impact Payments provided to help individuals meet basic needs during these difficult times do not end up in the pockets of creditors and debt collectors,” Senate Finance Committee Chairman Chuck Grassley (R-Iowa), one of the bill’s sponsors, said in a statement.
Senators urged the House to pass an identical version of the bill. The Senate bill cannot be sent directly to the House because it is a tax bill, but if the House passes an identical bill and sends it to the Senate, the measure could pass in the Senate and sent to President Trump, spokesman Grassley said.
“The House must immediately pass this bill and ensure that the money Congress has allocated to working families goes to pay for food, medicine and other necessities, not debt collectors,” said Senator Sherrod Brown (Ohio), the top Democrat. on the Senate Banking Committee and sponsor of the Senate bill.
The Senate’s passage of the bill comes as lawmakers and the White House work on another coronavirus relief package. Republicans and Democrats want to include a second round of direct payments in this package.
House Democrats passed a $3 trillion coronavirus relief package in May that would provide for a second round of direct payments and also prevent direct payments from being seized by private debt collectors.
