Customers desperately waiting for stimulus cash from Uncle Sam are having it taken away before they can get their hands on it. It’s happening if a bank patron has an account in the red. The New York Times writes:
“The phenomenon is swiftly becoming a political issue, with Treasury Secretary Steven Mnuchin fielding calls from senators urging him to ensure that relief money isn’t garnished. Banks are legally allowed to withhold funds that go into accounts that have negative balances, and no specific provision in the CARES Act, the $2 trillion relief package that authorized the stimulus payments, prevents banks from taking customers’ stimulus money to cover debts.“
On Wednesday, two Democratic Senators asked banks to stop the practice. Senators Sherrod Brown and Elizabeth Warren wrote a letter to the American Bankers Association that said, “For weeks, we have pressed the Treasury Department to exercise its authority and ensure that Americans receive the full amount of their stimulus payments. While Treasury has refused to follow congressional intent, that does not give banks license to steal the stimulus payments from their customers.”
How many bank customers could this impact? The Times writes of a survey by Pew Charitable Trusts in 2018 that found 39 million Americans had incurred overdraft fees in the previous year, essentially using over drafting as credit.
Some of the nation’s biggest banks, Bank of America, JPMorgan Chase, Citibank and Wells Fargo, are not garnishing stimulus money.