"Americans are in dire need of money to pay their rent and put food on the table—this is absurd."
Sen. Kamala Harris and 13 other senators on Friday sent a letter to Treasury Secretary Steve Mnuchin demanding that coronavirus stimulus checks not be subject to debt collections as reports continue to increase of the one-time $1,200 payments being seized by creditors.
"Americans are in dire need of money to pay their rent and put food on the table—this is absurd," Harris tweeted Friday.
Unacceptable that debt collectors are cashing in on people's $1,200 direct payments. Americans are in dire need of… https://t.co/EB5t8KnykM— Kamala Harris (@Kamala Harris)1587142276.0
The letter, which was also signed by Sens. Dick Durbin (D-Ill.), Bernie Sanders (I-Vt.), Chris Murphy (D-Conn.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Jeff Merkley (D-Ore.), Patty Murray (D-Wash.), Doug Jones (D-Ala.), Sheldon Whitehouse (D-R.I.), Tammy Baldwin (D-Wis.), Amy Klobuchar (D-Minn.) and Tina Smith (D-Minn.), demands Mnuchin "exempt Americans’ direct assistance payments from private debt collection so that American families can receive critical assistance to help them get through this unprecedented crisis."
"The American people are struggling right now to find ways to navigate the current crisis and keep themselves and their families healthy," the letter continues. "They need this assistance more than ever and it is Treasury's responsibility to act and ensure that every American family who is eligible for the assistance can receive its full benefit."
The senators add that Mnuchin must act quickly, "given the fact that direct assistance payments will be mailed or deposited directly into banking accounts very soon."
According to The Hill, private financial institutions which are seizing the money are issuing their own letter to lawmakers claiming the Treasury Department and Congress have made it impossible to know what is and is not permitted:
Top banking associations also sent a letter to Sens. Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass.) noting that under the coronavirus bill, "Congress failed to define these payments as benefits subject to preemption from garnishment."
"As a result, with regard to any legal garnishment, depository institutions have no discretion and are obligated to comply with applicable state laws and court-ordered garnishments," the groups said, adding that Congress should pass language clarifying future COVID-19 payments.
Despite the claims that banks have their hands tied by the law, USAA was able to cease seizure and refund money taken from checks for veterans and their families on Thursday. As Common Dreams reported, the decision came after outrage in the wake of an exclusive from David Dayen of the American Prospect on the seizures. Dayen made the case for federal guidance on the payments after the reversal by USAA.
"Only a global solution by Treasury can ensure that the payments get into the hands of individuals struggling to make ends meet and afford basic necessities," wrote Dayen. "A bank-by-bank or state-by-state solution will ultimately not protect everyone in time."