'Beyond Predatory': Trump Treasury Department Gives Banks Green Light to Seize $1,200 Stimulus Check

[alwaysinasnit]

Source: Common Dreams

President Donald Trump's Treasury Department has given U.S. banks a green light to seize a portion or all of the one-time $1,200 coronavirus relief payments meant to help Americans cope with financial hardship and instead use the money to pay off individuals' outstanding debts—a move consumer advocates decried as cruel and unacceptable.

"The Treasury Department effectively blessed this activity on a webinar with banking officials last Friday," The American Prospect's David Dayen reported Tuesday.

In an audio recording from the webinar obtained exclusively by the Prospect, Ronda Kent, chief disbursing officer at the Treasury Department's Bureau of the Fiscal Service, told bankers that "there's nothing in the law that precludes" financial institutions from seizing a person's payment and using it to pay off the individual's debts.

...

Read more: https://www.commondreams.org/news/2020/04/14/beyond-predatory-trump-treasury-department-gives-banks-green-light-seize-1200

---

WTF????

[procon]

1. Wait... What? Does this mean Trump used the taxpayers

money to give the banking industry a free slush fund? Is that what I'm reading? And typical of Trump the businessman, he even screws over the folks who were desperately waiting on that money.

[alwaysinasnit]

2. If this sort of thing happened to a tRump supporter, I wonder what kind of reaction they would have.

[IronLionZion]

24. They would blame those damn foreigners

or someone other than Trump.

[CaptYossarian]

26. It isn't Trump the businessman.

He's using his money laundering instincts here.

That will only slow the money entering his effed up economy, thus keeping it effed up into November.

The Bond villians never think things all the way through.

[mr_lebowski]

3. They better be talking about legal/court-ordered liens or the proverbial shit will hit the fan ...

Always take Common Dreams w/a grain of salt.

A large one.

[LittleGirl]

14. What? Are? You? Saying? Eom

[progree]

4. Here's an earlier thread on that (in GD, so I'm not saying this is a dupe)

Your Bank Can Grab Your $1,200 Coronavirus Check
https://www.democraticunderground.com/100213283987

From NPR:
https://www.mprnews.org/story/2020/04/10/npr-those-1-200-emergency-payments-are-arriving-and-debt-collectors-may-be-eyeing-th

Saunders worries that millions of Americans could get their emergency government payments snatched right out of their bank accounts. "It happens all the time to people," says Farah Majid, a lawyer at Legal Services Alabama. She notes that debt collectors often get court judgments against people, which enables the collectors to get the money from people's banks.

If debt collectors can find money sitting in a bank account, she says, "they can just grab whatever money is in there, so it's really easy for them to collect their money that way." Some states have protections, but many allow collectors to grab large sums of money, Majid says.

But there is something the government could do to try to block the debt collectors. There's already a system to protect benefits such as Social Security. Those government payments are coded in a special way. "Banks automatically know not to let collectors grab that money," says the NCLC's Saunders."We are trying to get these stimulus payments coded in the exact same way, because they are intended for food and basic necessities, just like Social Security payments." There's some bipartisan support for that. ...

[alwaysinasnit]

5. Thanks. I missed seeing that, and I apologize to you and RandySF.

[progree]

6. Oh heck no, please don't apologize. It's important news of national interest, is not a dupe of

anything else in LBN, so is perfectly within LBN rules, and belongs here too!

[SunSeeker]

7. I hope those poor folks did not set up direct deposit.

These checks are now basically making rich banks richer instead of feeding desperate people.


Fucking sickening.

[progree]

8. Those that are getting direct deposit risk seizures, while people getting paper checks risk becoming

violently ill:

Coming to your $1,200 relief check: Donald J. Trump's name
https://www.democraticunderground.com/10142470729

The Treasury Department has ordered President Trump’s name be printed on stimulus checks the Internal Revenue Service is rushing to send to tens of millions of Americans, a process that is expected to slow their delivery by several days, senior agency officials said.
...

[Hekate]

39. People get really pressured to do direct deposit. I mean, really pressured. nt

[PSPS]

9. A gift to the predatory debt-collection industry, whose Obama-era restrictions were gutted by trump

[yuiyoshida]

10. Trump... The

Asshole President.

[Dan]

11. This is a gift to the banks, loan companies, etc.

[whistler162]

18. You forgot the ex-spouses and children!

[Dan]

31. Hahaha

Never been in that position so it never occurred to me

[NBachers]

13. Gee Whiz - we got the rug pulled out from under us again! Golly, I wish they wouldn't do that.

I can't fucking hack it any more.

[orangecrush]

42. This.

[LittleGirl]

15. Absolutely criminal! GD it. eom

[duforsure]

16. trump proves to all again his intent

Is to hurt people during the greatest health crisis this country or the world has ever seen , and HE does this to Americans. He could care less about his supporters because they will be hurt the most from his policies .

[oldsoftie]

17. Same thing happened with the checks sent out during the Obama stimulus.

I have a friend who; When the last stimulus checks went out 10 yrs ago, he was lamenting how he wouldnt get one, so I told him what he needed to do to get it. So instead he gets a letter telling him "your money has been applied to the amount you owe" which was about 12k. He said he "forgot" about that. Then I find out he hasnt field in years!

[lambchopp59]

19. So's ya gots ya starvin' chillin's dere do Ya?

Well, ya should'a thought about dat before ya ran up yer tab, Jack. Nize plaze ya got here, shame if something were to... heh heh heh... happen to it.
?w=500

[SheltieLover]

20. "Starve them out!"

Repukes suck!

Clearly trying to force people back to work in terribly unsafe conditions! 🤬🤬🤬

[Vinca]

21. That's too cruel even for Trump. Reminds me of how Mnuchin got so rich.

[moonseller66]

22. So that was the intent all along!

No wonder the Republicans agreed so readily to this bill. They knew their ASSociates would be getting the money in a really shitty way.

Anyone who votes Republican is basically an asshole and deserves never to complain about the government again.

Republicans: happily fucking common Americans since 1980.

[Maeve]

23. Meanwhile, in Ohio

https://abc6onyourside.com/news/local/stimulus-checks-cant-be-seized-by-debt-collectors-in-ohio-says-attorney-general

Stimulus checks can't be seized by debt collectors in Ohio, says attorney general
COLUMBUS, Ohio (WYSX/WTTE) — Under Ohio law, the federal Economic Impact payments coming to at least 80 million Americans during the COVID-19 pandemic cannot be garnished by landlords, debt collectors, state or federal tax collectors, or any other bill collector who may claim rights to individual payments, according to Ohio's attorney general on Tuesday.

Dave Yost made the announcement as fears began to materialize nationwide Tuesday regarding the checks and who might be able to seize them.

"You can pay down an old debt, you can pay off your credit card with it if that's what you want to do," Yost said. "But the money is designed to be there to keep the lights on, keep food on our tables. It's not there to retire an old bill."

[tanyev]

25. Can the check still be deposited if one writes the word "F**k" in front of DJT's signature?

[duforsure]

27. What he's doing with this

Is morally and ethically wrong, especially from someone who 's whole career has been stiffing people he's owed money too.

[Bayard]

28. Wait a minute

I'm sure Dems anticipated this action. I'm betting there's wording in the bill that prohibits this atrocity.

[TryLogic]

29. So everything shuts down except debt payments due?

This is one of the reasons people become hostile toward capitalism, big robber banks, billionaires, the greedy class.

[gopiscrap]

30. each state attorney general should put a law in

place to stop this sort of shit

[MiniMe]

32. So if you need the check to be able to feed your kids, you are SOL?

Grrrrr

[not_the_one]

33. I got notice this morning on my bank account of deposits....

I have already done my 2019 tax return (filed electronically by Mr. Block on April 6th). I should have received the 1200. I got 1002.90.

They used LAST years AGI. I checked the online calculator, using last year's AGI and I should receive 1002.90.



YMMV

Edit to add THANK YOU DEMOCRATS FOR MY STIMULUS CHECK!!!!!!!!!!!!!!!!!!!!!

[alwaysinasnit]

34. Interesting. Does this mean that they can use whichever of the two tax years results in a lower

payment to the taxpayer?

[Massacure]

35. No

From my understanding (and take it with a grain of salt), the stimulus check is a refund on your 2020 taxes (which need to be filed by April 15, 2021) that is being paid out early. Since no one has filed their 2020 taxes, the refund is being calculated on their 2019 taxes. If you haven't filed 2019 taxes yet, then it will be based on your 2018 taxes. If the payment is based on your 2018 taxes and your 2019 taxes would have resulted in a lower payment, the IRS will not require you to pay the money back. Likewise, an increase in income in 2020 will not negatively affect anyone either.

[alwaysinasnit]

36. Thanks for the clarification.

[shanti]

37. I'd read that it was only child support

that would be intercepted, and no other debts. But with the way news changes so quickly, maybe it has changed?

[EndlessWire]

38. I don't believe I'll get anything.

Last edited Tue Apr 21, 2020, 02:34 PM - Edit history (1)

But I wish I would get a letter explaining what they did with my payment.

I find all this changing about so confusing and overwhelming. I went to the IRS website to see if I needed to do anything to take a stab at this money. (The link was provided by a thoughtful DUer, thank you.) There, they said that if you had no direct deposit set up, and hadn't filed at all, then you could use this alternative method to receive something--except it was only for people who made under $12,200.

WHAT?? Those that fall into that category can't make more than the ridiculous sum of $12,200. I thought, trying to remember here, that the sum at which you had to file was higher than that by a lot, so what gives with that? I didn't file a return yet, because I still think I don't have to, but did they change that too when they did the millionaire giveaway? And, please tell me they extended the tax deadline...If I now have to file, I think I'll just let them compute whatever they want to scrape off my tired old bones.

Well, I don't fall into that category. I fall into the "don't do anything and spend forever wondering why once again you didn't get anything."

I'm enjoying reading the stories of people who got it. It makes me feel good to hear that people are prevailing. But, I feel like the whole process ran over me. I must be tired without knowing it, because I'm usually sharp on such stuff, but damn! Is this the way Trump thinks? Who is running this crap show?

[alwaysinasnit]

40. Who is eligible? I hope this helps.

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:

$75,000 for individuals
$112,500 for head of household filers and
$150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their AGI (Adjusted Gross Income) is between:

$75,000 and $99,000 if their filing status was single or married filing separately
112,500 and $136,500 for head of household
$150,000 and $198,000 if their filing status was married filing jointly

The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.

Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.

[riversedge]

41. k

[melm00se]

43. As a former debt collector let me discuss the realities of the situation

Depending upon the loan type, loan status, the state's regulatory position and the customer's legal situation related to the loan in question, this may or may not (actually probably not) be true.

Scenario #1
If the customer
1. has a deposit account at "Bob's Bank" bank
2. has an installment loan at "Bob's Bank" bank
3. is past due on that loan.

The "Bob's Bank" may have the "right of offset". If allowed by the contract's terms and state banking regulations, the bank may have the right to debit the customer's account for the past due payments. Please note that this only applies to installment loans.

Scenario #2
If the customer:
1. has a past due loan at "Bob's Bank"
2. has a deposit account at "Charlie's Credit Union"

Bob's Bank, unless specifically authorized by the customer (like an autopay), cannot debit the customer's account for payments. Even with autopay, Bob's Bank may not be allowed to debit outside the agreed upon autopay terms (so no debiting accounts other than the agreed upon/approved date).

Scenario #3
If the customer:
1. has a credit card account at Bob's Bank
2. has a deposit account at Bob's Bank.
3. is past due on the credit card account.

Under Federal Reserve Board’s Regulation Z, Section 226.12(d), banks are specifically prohibited from exercising the right of offset.


Scenario #4
If the customer:
1. has a defaulted account at Bob's Bank.
2. has been sued by Bob's Bank.
3. has a judgment filed against them for non-payment
4. lives in a state that allows for bank levies.

The sheriff (or whatever entity is allowed to execute levies) can seize money from a bank account pursuant to the state's laws regarding bank levies and judgments.

Scenario #5
If the customer:
1. had a defaulted account at Bob's Bank.
2. has had their account placed with a debt agency.

Unless the account relationship with the customer is similar to scenario #1, the collection agency cannot debit the deposit account (but the bank can). If the customer fits into scenario #1, the bank, more than likely, would never send it to an agency.

Scenario #6
If the customer:
1. had a defaulted account at Bob's Bank.
2. has had their account sold to a debt collector (this is different than placed with a collection agency).

Unless the debt collection company has a valid judgment (see scenario #4), the customer's deposit account cannot levied.

So out of 6 likely scenarios, this would only apply to one of them. In my experience, one of the fastest ways to have a customer shift deposit accounts is to offset their past due loan payment(s) from their checking account. Do that once, the customer is out the door and down the road and has complete hatred of the bank. This is why the banks I worked for (from floor collector to Vice President of default management) did not allow individual contributors to offset payments. It must have the approval of their supervisor or manager.

This article is really nothing more than clickbait and a flashpoint for the uninformed to throw up their arms in outrage.

[Bengus81]

44. Then why did the Massachusetts AG go to all the trouble?

"On Monday, Massachusetts Attorney General Maura Healey issued guidance stating that the $1,200 payments "are exempt from seizure or garnishment by creditors under Massachusetts law."

[melm00se]

45. Notice the wording

"are exempt from seizure or garnishment by creditors under Massachusetts law."

garnishments and seizures are usually referred to in reference to judgments for a debt or other claim.

A lender does not have the unilateral ability to seize money from a bank account as long as the account is kept current AND any deposit account is held at the same institution (scenario #1 from above).

No lender can call up another bank and say "hey charlie, can you debit "bob's" account with you and send me the money?". That would be a levy and levies can only happen with the blessings of the court (via a judgment) and are executed by the local sheriff or other legislatively designated person or persons.

The rules involving child support are a little different and beyond the scope of this discussion.

You can believe me or not. I am just stating the scenarios I have seen and been involved in my (thankfully former) career as a debt collector for both banks and collection agencies (never ever worked for a debt purchasing company as they, almost universally, are scumbags).